Exhibit 4.5
WOLVERINE WORLD WIDE, INC.
COMPOSITE CONFORMED COPY OF THE NOTE AGREEMENT
Re: $30,000,000 7.81% Senior Notes
Due August 15, 2004
PPN 978097 A#0
Closing Date: August 15, 1994
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Separate and several Note Agreements each dated as of August 1, 1994, in
the form attached hereto, were entered into by Wolverine World Wide, Inc., a
Delaware corporation, and each of the institutions named below, respectively.
Each of said Note Agreements was executed on behalf of Wolverine World Wide,
Inc. by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President of Strategic Planning and Treasurer.
The separate Note Agreements were addressed to each of the institutions as
shown on Schedule I attached thereto and were accepted by the officers of the
respective institutions as shown below.
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Managing Director - Private Placements
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
FARM BUREAU LIFE INSURANCE COMPANY OF MICHIGAN
By: MIMLIC Asset Management Company
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
FB ANNUITY COMPANY
By: MIMLIC Asset Management Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
FEDERATED LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
FEDERATED MUTUAL INSURANCE COMPANY
By: MIMLIC Asset Management Company
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Vice President
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Wolverine World Wide, Inc.
Note Agreement
Dated as of August 1, 1994
Re: $30,000,000 7.81% Senior Notes
Due August 15, 2004
Table of Contents
(Not a part of the Agreement)
Section Heading Page
Section 1. Description of Notes and Commitment . . . . . . . . . . . . 1
Section 1.1. Description of Notes . . . . . . . . . . . . . . . . 1
Section 1.2. Commitment, Closing Date . . . . . . . . . . . . . . 1
Section 1.3. Other Agreements . . . . . . . . . . . . . . . . . . 2
Section 2. Prepayment of Notes . . . . . . . . . . . . . . . . . . . . 2
Section 2.1. Required Prepayments . . . . . . . . . . . . . . . . 2
Section 2.2. Optional Prepayment with Premium . . . . . . . . . . 2
Section 2.3. Prepayment of Notes upon Change of Control . . . . . 3
Section 2.4. Notice of Optional Prepayments . . . . . . . . . . . 5
Section 2.5. Application of Prepayments . . . . . . . . . . . . . 5
Section 2.6. Direct Payment . . . . . . . . . . . . . . . . . . . 5
Section 3. Representations . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.1. Representations of the Company . . . . . . . . . . . 6
Section 3.2. Representations of the Purchaser . . . . . . . . . . 6
Section 4. Closing Conditions . . . . . . . . . . . . . . . . . . . . 7
Section 4.1. Conditions . . . . . . . . . . . . . . . . . . . . . 7
Section 4.2. Waiver of Conditions . . . . . . . . . . . . . . . . 8
Section 5. Company Covenants . . . . . . . . . . . . . . . . . . . . . 9
Section 5.1. Corporate Existence, Etc. . . . . . . . . . . . . . 9
Section 5.2. Insurance . . . . . . . . . . . . . . . . . . . . . 9
Section 5.3. Taxes, Claims for Labor and Materials; Compliance
with Laws . . . . . . . . . . . . . . . . . . . . . 9
Section 5.4. Maintenance, Etc. . . . . . . . . . . . . . . . . . 10
Section 5.5. Nature of Business . . . . . . . . . . . . . . . . . 10
Section 5.6. Consolidated Adjusted Net Worth . . . . . . . . . . 10
Section 5.7. Fixed Charges Coverage Ratio . . . . . . . . . . . . 10
Section 5.8. Limitations on Funded Debt . . . . . . . . . . . . . 10
Section 5.9. Limitation on Liens . . . . . . . . . . . . . . . . 11
Section 5.10. Mergers, Consolidations and Sales of Assets . . . . 14
Section 5.11. Guaranties. . . . . . . . . . . . . . . . . . . . . 18
Section 5.12. Notes to Rank Pari Passu . . . . . . . . . . . . . 18
Section 5.13. Repurchase of Notes . . . . . . . . . . . . . . . . 18
Section 5.14. Transactions with Affiliates . . . . . . . . . . . 18
Section 5.15. Termination of Pension Plans . . . . . . . . . . . 19
Section 5.16. Reports and Rights of Inspection . . . . . . . . . 19
Section 6. Events of Default and Remedies Therefor . . . . . . . . . . 22
Section 6.1. Events of Default . . . . . . . . . . . . . . . . . 22
Section 6.2. Notice to Holders . . . . . . . . . . . . . . . . . 24
Section 6.3. Acceleration of Maturities . . . . . . . . . . . . . 24
Section 6.4. Rescission of Acceleration . . . . . . . . . . . . . 25
Section 7. Amendments, Waivers and Consents . . . . . . . . . . . . . 25
Section 7.1. Consent Required . . . . . . . . . . . . . . . . . . 25
Section 7.2. Solicitation of Holders . . . . . . . . . . . . . . 26
Section 7.3. Effect of Amendment or Waiver . . . . . . . . . . . 26
Section 8. Interpretation of Agreement; Definitions . . . . . . . . . 26
Section 8.1. Definitions . . . . . . . . . . . . . . . . . . . . 26
Section 8.2. Accounting Principles . . . . . . . . . . . . . . . 39
Section 8.3. Directly or Indirectly . . . . . . . . . . . . . . . 39
Section 9. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . 39
Section 9.1. Registered Notes . . . . . . . . . . . . . . . . . . 39
Section 9.2. Exchange of Notes . . . . . . . . . . . . . . . . . 40
Section 9.3. Loss, Theft, Etc. of Notes . . . . . . . . . . . . . 40
Section 9.4. Expenses, Stamp Tax Indemnity . . . . . . . . . . . 40
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative . 41
Section 9.6. Notices . . . . . . . . . . . . . . . . . . . . . . 41
Section 9.7. Successors and Assigns . . . . . . . . . . . . . . . 42
Section 9.8. Survival of Covenants and Representations . . . . . 42
Section 9.9. Severability . . . . . . . . . . . . . . . . . . . . 42
Section 9.10. Governing Law . . . . . . . . . . . . . . . . . . . 42
Section 9.11. Jurisdiction and Service of Process . . . . . . . . 42
Section 9.12. Captions . . . . . . . . . . . . . . . . . . . . . 43
Signature Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Attachments to Note Agreement:
Schedule I - Names and Addresses of Purchasers and Amounts of
Commitments
Schedule II - Funded Debt; Liens Securing Funded Debt (including
Capitalized Leases); and Subsidiaries as of August 1,
1994
Exhibit A - Form of 7.81% Senior Note due August 15, 2004
Exhibit B - Representations and Warranties of the Company
Exhibit C - Description of Special Counsel's Closing Opinion
Exhibit D - Description of Closing Opinion of Counsel to the
Company
Wolverine World Wide, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Note Agreement
Re:$30,000,000 7.81% Senior Notes
Due August 15, 2004
Dated as of
August 1, 1994
To the Purchaser named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, Wolverine World Wide, Inc., a Delaware corporation (the
"Company"), agrees with you as follows:
Section 1. Description of Notes and Commitment.
Section 1.1. Description of Notes. The Company will authorize the
issue and sale of $30,000,000 aggregate principal amount of its 7.81%
Senior Notes (the "Notes") to be dated the date of issue, to bear interest
from such date at the rate of 7.81% per annum, payable semi-annually on the
fifteenth day of February and August in each year (commencing February 15,
1995) and at maturity and to bear interest on overdue principal (including
any overdue required or optional prepayment of principal) and Make-Whole
Amount and (to the extent legally enforceable) on any overdue installment
of interest at the Overdue Rate after the date due, whether by acceleration
or otherwise, until paid, to be expressed to mature on August 15, 2004, and
to be substantially in the form attached hereto as Exhibit A. Interest on
the Notes shall be computed on the basis of a 360-day year of twelve 30-day
months. The Notes are not subject to prepayment or redemption at the
option of the Company prior to their expressed maturity dates except on the
terms and conditions and in the amounts and with the Make-Whole Amount set
forth in Section 2 of this Agreement. The term "Notes" as used herein
shall include each Note delivered pursuant to this Agreement and the
separate agreements with the other purchasers named in Schedule I. You and
the other purchasers named in Schedule I are hereinafter sometimes referred
to as the "Purchasers". The terms which are capitalized herein shall have
the meanings set forth in Section 8.1 unless the context shall otherwise
require.
Section 1.2. Commitment, Closing Date. Subject to the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, the Company agrees to issue and sell to you, and you
agree to purchase from the Company, Notes in the principal amount set forth
opposite your name on Schedule I hereto at a price of 100% of the principal
amount thereof on the Closing Date hereafter mentioned.
Delivery of the Notes will be made at the offices of ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, against payment
therefor in Federal Reserve or other funds current and immediately
available at the principal office of NBD Bank N.A., Detroit, Michigan, ABA
#▇▇▇-▇▇▇-▇▇▇, Account #▇▇-▇▇▇-▇▇, Attn: ▇▇▇▇▇▇ ▇▇▇▇▇ (313/225-1686) in the
amount of the purchase price at 10:00 A.M., Chicago, Illinois time, on
August 15, 1994 (the "Closing Date"). The Notes delivered to you on the
Closing Date will be delivered to you in the form of a single registered
Note in the form attached hereto as Exhibit A for the full amount of your
purchase (unless different denominations are specified by you), registered
in your name or in the name of such nominee, as may be specified in
Schedule I attached hereto.
Section 1.3. Other Agreements. Simultaneously with the execution and
delivery of this Agreement, the Company is entering into similar agreements
with the other Purchasers under which such other Purchasers agree to
purchase from the Company the principal amount of Notes set opposite such
Purchasers' names in Schedule I, and your obligation and the obligations of
the Company hereunder are subject to the execution and delivery of the
similar agreements by the other Purchasers. This Agreement and said
similar agreements with the other Purchasers are herein collectively
referred to as the "Agreements". The obligations of each Purchaser shall
be several and not joint and no Purchaser shall be liable or responsible
for the acts of any other Purchaser.
Section 2. Prepayment of Notes.
Section 2.1. Required Prepayments. In addition to paying the entire
outstanding principal amount and the interest due on the Notes on the
maturity date thereof, the Company agrees that on August 15 in each year,
commencing August 15, 1998 and ending August 15, 2003, both inclusive, it
will prepay and apply and there shall become due and payable on the
principal indebtedness evidenced by the Notes an amount equal to the lesser
of (a) $4,285,715 or (b) the principal amount of the Notes then
outstanding. The entire remaining principal amount of the Notes shall
become due and payable on August 15, 2004. No premium shall be payable in
connection with any required prepayment made pursuant to this Section 2.1.
In the event that the Company shall prepay less than all of the Notes
pursuant to Section 2.2 hereof, the amounts of the prepayments required by
this Section 2.1 shall be reduced by an amount which is the same percentage
of such required prepayment as the percentage that the principal amount of
Notes prepaid pursuant to Section 2.2 is of the aggregate principal amount
of outstanding Notes immediately prior to such prepayment.
Section 2.2. Optional Prepayment with Premium. In addition to the
payments required by Section 2.1, upon compliance with Section 2.4, the
Company shall have the privilege, at any time and from time to time, of
prepaying the outstanding Notes, either in whole or in part (but if in part
then in a minimum principal amount of $1,000,000), by payment of the
principal amount of the Notes, or portion thereof to be prepaid, and
accrued interest thereon to the date of such prepayment, together with a
premium equal to the Make-Whole Amount, determined as of two Business Days
prior to the date of such prepayment pursuant to this Section 2.2.
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Section 2.3. Prepayment of Notes upon Change of Control.
(a) In the event that any Change of Control (as hereinafter
defined) shall occur or the Company shall have actual knowledge
of any proposed Change of Control, the Company will give written
notice (the "Company Notice") of such fact in the manner provided
in Section 9.6 hereof to the holders of the Notes. The Company
Notice shall be delivered promptly upon receipt of such knowledge
by the Company and in any event no later than three Business Days
following the occurrence of any Change of Control. The Company
Notice shall (1) describe the facts and circumstances of such
Change of Control in reasonable detail, (2) make reference to
this Section 2.3 and the right of the holders of the Notes to
require prepayment of the Notes on the terms and conditions
provided for in this Section 2.3, (3) offer in writing to prepay
the outstanding Notes, together with accrued interest to the date
of prepayment, upon the actual occurrence of a Change of Control;
and (4) specify a date for such prepayment (the "Change of
Control Prepayment Date"), which Change of Control Prepayment
Date shall be not more than 90 days nor less than 30 days
following the date of such Company Notice. Each holder of the
then outstanding Notes shall have the right to accept such offer
and require prepayment of the Notes held by such holder in full
by written notice to the Company (a "Noteholder Notice") given
not later than 20 days after receipt of the Company Notice. In
the event the Change of Control described in any Company Notice
does, in fact, occur, the Company shall on the Change of Control
Prepayment Date prepay in full all of the Notes held by holders
which have so accepted such offer of prepayment. The prepayment
price of the Notes payable upon the occurrence of any Change of
Control shall be an amount equal to 100% of the outstanding
principal amount of the Notes so to be prepaid together with
accrued interest thereon to the date of such prepayment, but
without premium; provided, however, that if a Default or an Event
of Default shall have occurred and be continuing at the time of
such prepayment, the prepayment price shall include an amount
equal to the Make-Whole Amount, determined as of two Business
Days prior to the date of such prepayment pursuant to this
Section 2.3.
As used herein, the term "Change of Control" shall mean and
include each and every issue, transfer or other disposition of
shares of the stock of the Company (including, without
limitation, pursuant to a merger or consolidation otherwise
permitted hereunder) which results in a Person or a Group (other
than the Current Management Group) beneficially owning or
controlling, directly or indirectly, greater than 50% of the
Voting Stock of the Company.
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As used herein, the term "Current Management Group" shall
mean: (i) ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
▇▇., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇▇, or (ii) any Group
which includes and is under the general direction of any of the
above-named persons.
As used herein, the term "Group" shall mean any Group of
related persons constituting a "group" for the purposes of
Section 13(d) of the Securities Exchange Act of 1934, as amended,
or any successor provision.
(b) Without limiting the foregoing, notwithstanding any
failure on the part of the Company to give the Company Notice
herein required as a result of the occurrence of a Change of
Control, each holder of the Notes shall have the right by
delivery of written notice to the Company to require the Company
to prepay, and the Company will prepay, such holder's Notes in
full, together with accrued interest thereon to the date of
prepayment, provided that such holder of the Notes shall so
notify the Company of its election to require the Company to
prepay its Notes in accordance with this Section 2.3(b) within
90 days after such holder has actual knowledge of any such Change
of Control. Notice of any required prepayment pursuant to this
Section 2.3(b) shall be delivered by any holder of the Notes
which was entitled to, but did not receive, such Company Notice
to the Company after such holder has actual knowledge of such
Change of Control. On the date (the "Change of Control Delayed
Prepayment Date") designated in such holder's notice (which shall
be not more than 90 days nor less than 30 days following the date
of such holder's notice), the Company shall prepay in full all of
the Notes held by such holder, together with accrued interest
thereon to the date of prepayment, but without premium. If the
holder of any Note gives any notice pursuant to this Section
2.3(b), the Company shall give a Company Notice within three
Business Days of receipt of such notice and identify the Change
of Control Delayed Prepayment Date to all other holders of the
Notes which had not previously received a Company Notice and each
of such other holders shall then and thereupon have the right to
accept the Company's offer to prepay the Notes held by such
holder in full and require prepayment of such Notes by delivery
of a Noteholder Notice within 20 days following receipt of such
Company Notice; provided only that any date for prepayment of
such holder's Notes shall be the Change of Control Delayed
Prepayment Date. The Company shall only be required to give one
Company Notice to each holder of the Notes with respect to the
occurrence of each Change of Control. On the Change of Control
Delayed Prepayment Date, the Company shall prepay in full the
Notes of each holder thereof which has accepted such offer of
prepayment at a prepayment price equal to 100% of the outstanding
principal amount of the Notes so to be prepaid together with
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accrued interest thereon to the date of such prepayment, but
without premium.
Section 2.4. Notice of Optional Prepayments. The Company will give
notice of any prepayment of the Notes pursuant to Section 2.2 to each
holder thereof not less than 30 days nor more than 60 days before the date
fixed for such optional prepayment specifying (a) such date, (b) the
principal amount of the holder's Notes to be prepaid on such date, (c) that
a premium may be payable, (d) the date when such premium will be
calculated, (e) the estimated premium, and (f) the accrued interest
applicable to the prepayment. Such notice of prepayment shall also certify
all facts, if any, which are conditions precedent to any such prepayment.
Notice of prepayment having been so given, the aggregate principal amount
of the Notes specified in such notice, together with accrued interest
thereon and the Make-Whole Amount payable with respect thereto shall become
due and payable on the prepayment date specified in said notice. Not later
than two Business Days prior to the prepayment date specified in such
notice, the Company shall provide each holder of a Note written notice of
the Make-Whole Amount payable in connection with such prepayment and,
whether or not any premium is payable, a reasonably detailed computation of
the Make-Whole Amount.
Section 2.5. Application of Prepayments. All partial prepayments
shall be applied on all outstanding Notes ratably in accordance with the
unpaid principal amounts thereof.
Section 2.6. Direct Payment. Notwithstanding anything to the
contrary contained in this Agreement or the Notes, in the case of any Note
owned by you or your nominee or owned by any subsequent Institutional
Holder which has given written notice to the Company requesting that the
provisions of this Section 2.6 shall apply, the Company will punctually pay
when due the principal thereof, interest thereon and Make-Whole Amount due
with respect to said principal, without any presentment thereof, directly
to you, to your nominee or to such subsequent Institutional Holder at your
address or your nominee's address set forth in Schedule I hereto or such
other address as you, your nominee or such subsequent Institutional Holder
may from time to time designate in writing to the Company or, if a bank
account with a United States bank is designated for you or your nominee on
Schedule I hereto or in any written notice to the Company from you, from
your nominee or from any such subsequent Institutional Holder, the Company
will make such payments in immediately available funds to such bank
account, no later than 11:00 a.m. New York, New York time on the date due,
marked for attention as indicated, or in such other manner or to such other
account in any United States bank as you, your nominee or any such
subsequent Institutional Holder may from time to time direct in writing.
If for any reason whatsoever the Company does not make any such payment by
such 11:00 a.m. transmittal time, such payment shall be deemed to have been
made on the next following Business Day and such payment shall bear
interest at the Overdue Rate. The holder of any Note to which this Section
applies agrees that if it shall sell or transfer any Note it will, before
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the delivery of the Note (unless it has already done so), make a notation
on it of all principal, if any, prepaid on the Note and will also note on
it the date to which interest has been paid on the Note. With respect to
each Note to which this Section applies, the Company shall be entitled to
presume conclusively that the original or such subsequent Institutional
Holder that shall have requested the provisions of this Section to apply to
the Note remains the holder of the Note until (y) the Company shall have
received written notice of the transfer of the Note, and of the name and
address of the transferee, or (z) the Note shall have been presented to the
Company as evidence of the transfer. At such time as the Note shall have
been paid in full, the holder of it shall, upon the written request of the
Company, return the Note to the Company with proper notation as to payment
in full.
Section 3. Representations.
Section 3.1. Representations of the Company. The Company represents
and warrants that all representations and warranties set forth in Exhibit B
are true and correct as of the date hereof and are incorporated herein by
reference with the same force and effect as though herein set forth in
full.
Section 3.2. Representations of the Purchaser.
(a) You represent, and in entering into this Agreement the
Company understands, that you are acquiring the Notes for the
purpose of investment and not with a view to the distribution
thereof, and that you have no present intention of selling,
negotiating or otherwise disposing of the Notes, it being
understood, however, that the disposition of your property shall
at all times be and remain within your control. Without limiting
the foregoing, you agree that you will not offer to reoffer or
resell the Notes purchased by you under this Agreement to any
Person unless such Person is an Institutional Holder and, to your
knowledge, such Person is not a Competitor.
(b) You further represent that either: (1) you are
acquiring the Notes with your general account assets and in
reliance upon the validity of Department of Labor Interpretive
Bulletin 75-2, 29 C.F.R. 2509.75-2 (November 13, 1986), that no
part of such assets constitutes assets of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan"
within the meaning of Section 4975(e)(1) of the Code; (2) no part
of the funds to be used by you to purchase the Notes constitutes
assets allocated to any separate account maintained by you such
that the application of such funds constitutes a prohibited
transaction under Section 406 of ERISA; or (3) all or a part of
such funds constitute assets of one or more separate accounts,
trusts or a commingled pension trust maintained by you, and you
have disclosed to the Company in writing the names of such
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employee benefit plans whose assets in such separate account or
accounts or pension trusts exceed 10% of the total assets or are
expected to exceed 10% of the total assets of such account or
accounts or trusts as of the date of such purchase and the
Company has advised you in writing (and in making the
representations set forth in this clause (3) you are relying on
such advice) that the Company is not a party-in-interest nor are
the Notes employer securities with respect to the particular
employee benefit plan disclosed to the Company by you as
aforesaid (for the purpose of this clause (3), all employee
benefit plans maintained by the same employer or employee
organization are deemed to be a single plan). As used in this
Section 3.2(b), the terms "separate account", "party-in-
interest", "employer securities" and "employee benefit plan"
shall have the respective meanings assigned to them in ERISA.
Section 4. Closing Conditions.
Section 4.1. Conditions. Your obligation to purchase the Notes on
the Closing Date shall be subject to the performance by the Company of its
agreements hereunder which by the terms hereof are to be performed at or
prior to the time of delivery of the Notes and to the following further
conditions precedent:
(a) Closing Certificate. You shall have received a
certificate dated the Closing Date, signed by the President or a
Vice President of the Company, the truth and accuracy of which
shall be a condition to your obligation to purchase the Notes
proposed to be sold to you and to the effect that (1) the
representations and warranties of the Company set forth in
Exhibit B hereto are true and correct on and with respect to the
Closing Date, (2) the Company has performed all of its
obligations hereunder which are to be performed on or prior to
the Closing Date, and (3) no Default or Event of Default has
occurred and is continuing.
(b) Legal Opinions. You shall have received from ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇, who are acting as your special counsel in this
transaction, and from Warner, Norcross & ▇▇▇▇, counsel for the
Company, their respective opinions dated the Closing Date, in
form and substance satisfactory to you, and covering the matters
set forth in Exhibits C and D, respectively, hereto.
(c) Company's Existence and Authority. On or prior to the
Closing Date, you shall have received, in form and substance
reasonably satisfactory to you and your special counsel, such
documents and evidence with respect to the Company as you may
reasonably request in order to establish the existence and good
standing of the Company and the authorization of the transactions
contemplated by this Agreement.
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(d) Related Transactions. The Company shall have
consummated the sale of the entire principal amount of the Notes
scheduled to be sold on the Closing Date pursuant to this
Agreement and the other agreements referred to in Section 1.3.
(e) Private Placement Number. On or prior to the Closing
Date, special counsel to the Purchasers shall have obtained from
Standard & Poor's CUSIP Service Bureau, as agent for the National
Association of Insurance Commissioners, a private placement
number for the Notes.
(f) Funding Instructions. At least three Business Days
prior to the Closing Date, you shall have received written
instructions executed by a Responsible Officer of the Company
directing the manner of the payment of funds and setting forth
(1) the name and address of the transferee bank, (2) such
transferee bank's ABA number, (3) the account name and number
into which the purchase price for the Notes is to be deposited,
and (4) the name and telephone number of the account
representative responsible for verifying receipt of such funds.
(g) Special Counsel Fees. Concurrently with the delivery
of the Notes to you on the Closing Date, the charges and
disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, your special counsel,
incurred through the Closing Date shall have been paid by the
Company.
(h) Legality of Investment. The Notes to be purchased by
you shall be a legal investment for you under the laws of each
jurisdiction to which you may be subject (without resort to any
so-called "basket provisions" to such laws).
(i) Satisfactory Proceedings. All proceedings taken in
connection with the transactions contemplated by this Agreement,
and all documents necessary to the consummation thereof, shall be
satisfactory in form and substance to you and your special
counsel, and you shall have received a copy (executed or
certified as may be appropriate) of all legal documents or
proceedings taken in connection with the consummation of said
transactions.
Section 4.2. Waiver of Conditions. If on the Closing Date the
Company fails to tender to you the Notes to be issued to you on such date
or if the conditions specified in Section 4.1 have not been fulfilled, you
may thereupon elect to be relieved of all further obligations under this
Agreement. Without limiting the foregoing, if the conditions specified in
Section 4.1 have not been fulfilled, you may waive compliance by the
Company with any such condition to such extent as you may in your sole
discretion determine. Nothing in this Section 4.2 shall operate to relieve
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the Company of any of its obligations hereunder or to waive any of your
rights against the Company.
Section 5. Company Covenants.
From and after the Closing Date and continuing so long as any amount
remains unpaid on any Note:
Section 5.1. Corporate Existence, Etc.. The Company will preserve
and keep in full force and effect, and will cause each Subsidiary to
preserve and keep in full force and effect, its corporate existence and all
licenses and permits necessary to the proper conduct of its business where
the failure to do so could reasonably be expected to materially and
adversely affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole, provided that the foregoing shall not prevent any transaction
permitted by Section 5.10.
Section 5.2. Insurance. The Company will maintain, and will cause
each Subsidiary to maintain, insurance coverage by financially sound and
reputable insurers and in such forms and amounts and against such risks as
are customary for corporations of established reputation engaged in the
same or a similar business and owning and operating similar properties.
Section 5.3. Taxes, Claims for Labor and Materials; Compliance with
Laws.
(a) The Company will promptly pay and discharge, and will
cause each Subsidiary promptly to pay and discharge, all lawful
taxes, assessments and governmental charges or levies imposed
upon the Company or such Subsidiary, respectively, or upon or in
respect of all or any part of the property or business of the
Company or such Subsidiary, all trade accounts payable in
accordance with usual and customary business terms, and all
claims for work, labor or materials, which if unpaid could
reasonably be expected to become a Lien upon any property of the
Company or such Subsidiary; provided the Company or such
Subsidiary shall not be required to pay any such tax, assessment,
charge, levy, account payable or claim if (1) the validity,
applicability or amount thereof is being contested in good faith
by appropriate actions or proceedings which will prevent the
forfeiture or sale of any property of the Company or such
Subsidiary or any material interference with the use thereof by
the Company or such Subsidiary, and (2) the Company or such
Subsidiary shall set aside on its books, reserves deemed by it to
be adequate with respect thereto.
(b) The Company will promptly comply and will cause each
Subsidiary to promptly comply with all laws, ordinances or
governmental rules and regulations to which it is subject,
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including, without limitation, the Occupational Safety and Health
Act of 1970, as amended, ERISA and all Environmental Laws, the
violation of any of which could reasonably be expected to
materially and adversely affect the properties, business,
prospects, profits or condition (financial or otherwise) of the
Company and its Subsidiaries, taken as a whole, or could
reasonably be expected to result in any Lien not permitted under
Section 5.9.
Section 5.4. Maintenance, Etc. The Company will maintain, preserve
and keep, and will cause each Subsidiary to maintain, preserve and keep,
its properties which are used or useful in the conduct of its business
(whether owned in fee or a leasehold interest) in good repair and working
order and from time to time will make all necessary repairs, replacements,
renewals and additions so that at all times the efficiency of those
properties, taken as a whole, shall be maintained.
Section 5.5. Nature of Business. Neither the Company nor any
Subsidiary will engage in any business if, as a result, the general nature
of the business, taken on a consolidated basis, which would then be engaged
in by the Company and its Subsidiaries would be substantially changed from
the general nature of the business engaged in by the Company and its
Subsidiaries on the date of this Agreement.
Section 5.6. Consolidated Adjusted Net Worth. The Company will at
all times keep and maintain Consolidated Adjusted Net Worth at an amount
not less than the sum of (i) $86,000,000 plus (ii) the aggregate of 40% of
positive Consolidated Net Earnings computed on a cumulative basis for each
fiscal year of the Company commencing with the fiscal year ending
December 31, 1994; provided that for purposes of the foregoing calculation,
Consolidated Net Earnings shall be deemed to be zero for any period for
which Consolidated Net Earnings are less than or equal to zero.
Section 5.7. Fixed Charges Coverage Ratio. The Company will keep and
maintain the ratio of Net Earnings Available for Fixed Charges to Fixed
Charges for each period of 12 consecutive calendar months immediately
preceding the date of any computation hereunder at not less than 1.50 to
1.00.
Section 5.8. Limitations on Funded Debt.
(a) The Company will not, and will not permit any Subsidiary
to, create, assume or incur or in any manner be or become liable
in respect of any Funded Debt, except:
(1) Funded Debt evidenced by the Notes;
(2) Funded Debt of the Company and its Subsidiaries
outstanding as of the Closing Date and reflected on Schedule
II hereto, or any extension, renewal or refunding of any
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such Funded Debt without increase in the principal amount
thereof at the time of such extension, renewal or refunding;
and
(3) Additional Funded Debt of the Company and its
Subsidiaries incurred after the Closing Date; provided that
at the time of creation, issuance, assumption, guarantee or
incurrence thereof and after giving effect thereto and to
the application of the proceeds thereof:
(i) Consolidated Funded Debt shall not exceed an
amount equal to 55% of Total Capitalization; and
(ii) Priority Debt shall not exceed an amount
equal to 20% of Consolidated Adjusted Net Worth.
(b) Any corporation which becomes a Subsidiary after the
date hereof shall for all purposes of this Section 5.8 be deemed
to have created, assumed or incurred at the time it becomes a
Subsidiary all Funded Debt of such corporation existing
immediately after it becomes a Subsidiary.
Section 5.9. Limitation on Liens.
(a) The Company will not, and will not permit any Subsidiary
to, create or incur, or suffer to be incurred or to exist, any
Lien on its or their property or assets, whether now owned or
hereafter acquired, or upon any income or profits therefrom, or
transfer any property for the purpose of subjecting the same to
the payment of obligations in priority to the payment of its or
their general creditors, or acquire or agree to acquire, or
permit any Subsidiary to acquire, any property or assets upon
Conditional sales agreements or other title retention devices,
except:
(1) Liens for taxes and assessments or governmental
charges or levies and Liens securing claims or demands of
mechanics and materialmen, provided that payment thereof is
not at the time required by Section 5.3;
(2) Liens of or resulting from any judgment or award,
the time for the appeal or petition for rehearing of which
shall not have expired, or in respect of which the Company
or a Subsidiary shall at any time in good faith be
prosecuting an appeal or proceeding for a review and in
respect of which a stay of execution pending such appeal or
proceeding for review shall have been secured; provided
that, in the case of any Lien resulting from a judgment or
award in excess of $1,000,000, the Company or the affected
Subsidiary shall have obtained and shall maintain during the
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pendency of such appeal or proceeding for review an appeal
bond or Qualified Letter of Credit securing the Company's or
such Subsidiary's full performance in connection with such
judgment or award;
(3) Liens incidental to the conduct of business or the
ownership of properties and assets (including Liens in
connection with worker's compensation, unemployment
insurance and other like laws, warehousemen's and attorneys'
liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to
secure statutory obligations, surety or appeal bonds or
other Liens of like general nature, in any such case
incurred in the ordinary course of business and not in
connection with the borrowing of money; provided such Liens
do not in the aggregate materially impair the use or value
of properties and assets which, individually or in the
aggregate are material to the operation of the business of
the Company, or the business and operations of the Company
and its Subsidiaries taken as a whole; provided further, in
each case, the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate
actions or proceedings;
(4) minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-
of-way, utilities and other similar purposes, or zoning or
other restrictions as to the use of real properties, which
are necessary for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on
properties of corporations engaged in similar activities and
similarly situated and which do not in any event materially
impair their use in the operation of the business of the
Company and its Subsidiaries;
(5) Liens securing Debt of a Subsidiary to the Company
or to another Wholly-owned Subsidiary;
(6) Liens relating to Funded Debt and existing as of
the Closing Date and described on Schedule II hereto and any
extensions, renewals or replacements, in whole or in part of
any such Lien, provided that, with respect to any such
extension, renewal or replacement, (i) the principal amount
of Debt so secured at the time of such extension, renewal or
replacement shall not be increased in aggregate principal
amount and such Debt would be otherwise permitted pursuant
to the terms of the Agreement including without limitation
Section 5.8, (ii) such extension, renewal or replacement
shall be limited to all or any part of the same property
that secured the Lien extended, renewed or replaced;
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(7) Liens (including Capitalized Leases) created or
incurred after the Closing Date given to secure the payment
of the purchase price, cost of improvement or cost of
construction of property or assets useful and intended to be
used in carrying on the business of the Company or a
Subsidiary, including Liens existing on such property or
assets at the time of acquisition thereof or at the time of
acquisition or purchase by the Company or a Subsidiary of
any business entity then owning such property or assets,
whether or not such existing Liens were given to secure the
payment of the purchase price of the property or assets to
which they attach, provided that (1) the Lien shall attach
solely to the property or assets acquired, purchased,
improved or constructed, (2) such Lien shall have been
created or incurred within 120 days of the date of
acquisition or purchase or of completion of such improvement
or construction, as the case may be, (3) at the time of
acquisition or purchase or the date of completion of such
improvement or construction, as the case may be, the
aggregate amount remaining unpaid on all Indebtedness
secured by Liens on such property or assets, whether or not
assumed by the Company or a Subsidiary, shall not exceed the
lesser of (i) the total purchase price, cost of improvement
or cost of construction, as the case may be, or (ii) the
fair market value at the time of acquisition or purchase or
the date of completion of the improvement or construction of
such property or assets (as determined in good faith by the
Board of Directors of the Company) and (4) all Funded Debt
secured by any such Lien shall have been incurred within the
limitations provided in Section 5.8(a)(3); and
(8) Liens on inventory and receivables of Hush Puppies
Canada securing obligations of Hush Puppies Canada not to
exceed Can. $1,500,000 owing under the Hush Puppies Canada
Credit Facilities.
(9) Liens created or incurred after the Closing Date
given to secure Funded Debt of the Company or any Subsidiary
in addition to the Liens permitted by the preceding clauses
(1) through (8) hereof, provided that all Funded Debt
secured by such Liens shall have been incurred within the
applicable limitations provided in Section 5.8(a)(3).
(b) In case any property, asset or income or profits
therefrom is subjected to a Lien in violation of this Section
5.9, the Company will make or cause to be made provisions whereby
the Notes will be secured equally and ratably with all other
obligations secured thereby, and in any case the Notes shall have
the benefit, to the full extent that and with such priority as,
the holders may be entitled thereto under applicable law, of an
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equitable and ratable Lien on such property, asset, income or
profits securing the Notes. Such violation of Section 5.9 shall
constitute an Event of Default hereunder whether or not any such
provision is made pursuant to this Section 5.9(b), unless such
Event of Default is waived by the holders of 66-2/3% of the
Notes.
Section 5.10. Mergers, Consolidations and Sales of Assets.
(a) The Company will not, and will not permit any Subsidiary
to, consolidate with or be a party to a merger with any other
corporation, or sell, lease or otherwise dispose of all or
substantially all of its assets (except as provided in Section
5.10(b)); provided that:
(1) any Subsidiary may merge or consolidate with or
into the Company or any Wholly-owned Subsidiary so long as
in any merger or consolidation involving the Company, the
Company shall be the surviving or continuing corporation;
(2) the Company may consolidate or merge with or into
any other corporation if (i) the corporation which results
from such consolidation or merger (the "surviving
corporation") is organized under the laws of any state of
the United States or the District of Columbia, (ii) the due
and punctual payment of the principal, Make-Whole Amount and
interest on all of the Notes, according to their tenor, and
the due and punctual performance and observation of all of
the covenants in the Notes and this Agreement to be
performed or observed by the Company are expressly assumed
in writing by the surviving corporation and the surviving
corporation shall furnish to the holders of the Notes an
opinion of counsel satisfactory to such holders to the
effect that the instrument of assumption has been duly
authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the
surviving corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency, reorganization, moratorium and
similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles, and (iii) at
the time of such consolidation or merger and immediately
after giving effect thereto, (A) no Default or Event of
Default would exist and (B) the surviving corporation would
be permitted by the provisions of Section 5.8(a)(3) to incur
at least $1.00 of additional Funded Debt;
(3) the Company may sell or otherwise dispose of all
or substantially all of its assets (other than stock and
Debt of a Subsidiary, which may only be sold or otherwise
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disposed of pursuant to Section 5.10(c)) to any Person for
consideration which represents the fair market value of such
assets (as determined in good faith by the Board of
Directors of the Company, a copy of which determination,
certified by the Secretary or an Assistant Secretary of the
Company, shall have been furnished to the holders of the
Notes) at the time of such sale or other disposition if
(i) the acquiring Person is a corporation organized under
the laws of any state of the United States or the District
of Columbia, (ii) the due and punctual payment of the
principal, Make-Whole Amount and interest on all the Notes,
according to their tenor, and the due and punctual
performance and observance of all of the covenants in the
Notes and in this Agreement to be performed or observed by
the Company are expressly assumed in writing by the
acquiring corporation and the acquiring corporation shall
furnish the holders of the Notes an opinion of counsel
satisfactory to such holders to the effect that the
instrument of assumption has been duly authorized, executed
and delivered and constitutes the legal, valid and binding
contract and agreement of such acquiring corporation
enforceable in accordance with its terms, except as
enforcement of such terms may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws
affecting the enforcement of creditors' rights generally and
by general equitable principles, and (iii) at the time of
such sale or disposition and immediately after giving effect
thereto, (A) no Default or Event of Default would exist and
(B) the acquiring corporation would be permitted by the
provisions of Section 5.8(a)(3) to incur at least $1.00 of
additional Funded Debt.
(b) The Company will not, and will not permit any
Subsidiary to, sell, lease, transfer, abandon or otherwise
dispose of assets (except assets sold in the ordinary course of
business for fair market value and except as provided in Section
5.10(a)(3)); provided that the foregoing restrictions do not
apply to:
(1) the sale, lease, transfer or other disposition of
assets of a Subsidiary to the Company or a Wholly-owned
Subsidiary; or
(2) the sale of such assets for cash or other property
to a Person or Persons other than an Affiliate if all of the
following conditions are met:
(i) such assets (valued at net book value) do
not, together with all other assets of the Company and
its Subsidiaries previously disposed of pursuant to
-15-
this Section 5.10(b)(2) and Section 5.10(c)(3) during
the same fiscal year (other than in the ordinary course
of business), exceed 10% of Consolidated Total Assets,
determined as of the end of the immediately preceding
fiscal year;
(ii) in the opinion of (A) the chief financial
officer of the Company in the case of any sale of any
asset having a fair market value of $5,000,000 or less,
or (B) the Company's Board of Directors in the case of
any sale of any asset having a fair market value of
greater than $5,000,000, the sale is for fair market
value and is in the best interests of the Company; and
(iii) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist, and (B) the
Company would be permitted by the provisions of Section
5.8(a)(3) to incur at least $1.00 of additional Funded
Debt;
provided, however, that for purposes of the
foregoing calculation, there shall not be included any
assets the proceeds of which were or are applied within
12 months of the date of sale of such assets to either
(A) the acquisition of, or Binding Commitment to
acquire, fixed assets useful and intended to be used in
the operation of the Company and its Subsidiaries and
having a fair market value (as determined in good faith
by the Board of Directors of the Company) at least
equal to that of the assets so disposed of or (B) the
prepayment at any applicable prepayment premium, on a
pro rata basis, of Senior Debt of the Company. It is
understood and agreed by the Company that any such
proceeds paid and applied to the prepayment of the
Notes as hereinabove provided shall be prepaid as and
to the extent provided in Section 2.2.
Computations pursuant to Section 5.10(b)(2)(i) shall include
dispositions made pursuant to Section 5.10(c)(3)(i) and
computations pursuant to Section 5.10(c)(3)(i) shall include
dispositions made pursuant to Section 5.10(b)(2)(i).
(c) The Company will not, and will not permit any
Subsidiary to, sell, pledge or otherwise dispose of any shares of
the stock (including as "stock" for the purposes of this Section
any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of a Subsidiary (said
stock, options, warrants and other Securities herein called
"Subsidiary Stock") or any Debt of any Subsidiary, nor will any
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Subsidiary issue, sell, pledge or otherwise dispose of any shares
of its own Subsidiary Stock, provided that the foregoing
restrictions do not apply to:
(1) the issue of directors' qualifying shares; or
(2) the issue of Subsidiary Stock to the Company or to
any Wholly-owned Subsidiary; or
(3) the sale or other disposition at any one time to a
Person (other than directly or indirectly to an Affiliate)
of the entire Investment of the Company and its other
Subsidiaries in any Subsidiary if all of the following
conditions are met:
(i) the assets (valued at net book value) of such
Subsidiary do not, together with all other assets of
the Company and its Subsidiaries previously disposed of
pursuant to Section 5.10(b)(2) and this Section
5.10(c)(3) during the same fiscal year (other than in
the ordinary course of business), and other than
dispositions of assets permitted by Section 5.10(b)(1),
exceed 10% of Consolidated Total Assets, determined as
of the end of the immediately preceding fiscal year;
(ii) in the opinion of (A) the chief financial
officer of the Company in the case of any sale of any
asset having a fair market value of $5,000,000 or less,
or (B) the Company's Board of Directors in the case of
any sale of any asset having a fair market value of
greater than $5,000,000, the sale is for fair market
value and is in the best interests of the Company;
(iii) immediately after the consummation of the
transaction and after giving effect thereto, such
Subsidiary shall have no Debt of or continuing
Investment in the capital stock of the Company or of
any Subsidiary and any such Debt or Investment shall
have been discharged or acquired, as the case may be,
by the Company or a Subsidiary; and
(iv) immediately after the consummation of the
transaction and after giving effect thereto, (A) no
Default or Event of Default would exist, and (B) the
Company would be permitted by the provisions of Section
5.8(a)(3) to incur at least $1.00 of additional Funded
Debt;
provided, however, that for purposes of the
foregoing calculation, there shall not be included any
-17-
assets the proceeds of which were or are applied within
12 months of the date of sale of such assets to either
(A) the acquisition of, or Binding Commitment to
acquire, fixed assets useful and intended to be used in
the operation of the Company and its Subsidiaries and
having a fair market value (as determined in good faith
by the Board of Directors of the Company) at least
equal to that of the assets so disposed of or (B) the
prepayment at any applicable prepayment premium, on a
pro rata basis, of Senior Debt of the Company. It is
understood and agreed by the Company that any such
proceeds paid and applied to the prepayment of the
Notes as hereinabove provided shall be prepaid as and
to the extent provided in Section 2.2.
Computations pursuant to Section 5.10(c)(3)(i) shall include
dispositions made pursuant to Section 5.10(b)(2)(i) and
computations pursuant to Section 5.10(b)(2)(i) shall include
dispositions made pursuant to Section 5.10(c)(3)(i).
Section 5.11. Guaranties. The Company will not, and will not permit
any Subsidiary to, become or be liable in respect of any Guaranty except
(i) Guaranties by the Company or a Subsidiary which are limited in amount
to a stated maximum dollar exposure, (ii) Guaranties by the Company of
Funded Debt of Subsidiaries incurred in compliance with Section 5.8, (iii)
Guaranties by the Company of short-term obligations (such as trade payables
and short-term bank borrowings) and lease rental obligations incurred in
the ordinary course of business of any Subsidiary and (iv) reimbursement
obligations of the Company or a Subsidiary relating to letters of credit
issued by a bank or other financial institution for the account of the
Company or any Subsidiary which letters of credit are issued in the
ordinary course of business of the Company or any such Subsidiary.
Section 5.12. Notes to Rank Pari Passu. The Company will keep and
maintain the Notes and all other obligations outstanding at any time under
this Agreement as direct obligations of the Company ranking pari passu as
against the assets of the Company with all other present and future
unsecured Senior Debt of the Company.
Section 5.13. Repurchase of Notes. Neither the Company nor any
Subsidiary or Affiliate over which the Company exercises control, directly
or indirectly, may repurchase, or make any offer to repurchase, any Notes
or prepay, or offer to prepay, any Notes other than pursuant to the terms
of this Agreement as in effect on the Closing Date.
Section 5.14. Transactions with Affiliates. The Company will not,
and will not permit any Subsidiary to, enter into or be a party to any
transaction or arrangement with any Affiliate (including, without
limitation, the purchase from, sale to or exchange of property with, or the
rendering of any service by or for, any Affiliate), except in the ordinary
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course of and pursuant to the reasonable requirements of the Company's or
such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a
comparable arm's-length transaction with a Person other than an Affiliate.
Section 5.15. Termination of Pension Plans. The Company will not and
will not permit any Subsidiary to withdraw from any Multiemployer Plan or
permit any employee benefit plan maintained by it to be terminated if such
withdrawal or termination could result in withdrawal liability (as
described in Part 1 of Subtitle E of Title IV of ERISA) in excess of
$500,000 or the imposition of a Lien on any property of the Company or any
Subsidiary pursuant to Section 4068 of ERISA.
Section 5.16. Reports and Rights of Inspection. The Company will
keep, and will cause each Subsidiary to keep, proper books of record and
account in which full and correct entries will be made of all dealings or
transactions of, or in relation to, the business and affairs of the Company
or such Subsidiary, in accordance with GAAP consistently applied (except
for changes disclosed in the financial statements furnished to you pursuant
to this Section 5.16 and concurred in by the independent public accountants
referred to in Section 5.16(b)), and will furnish to you so long as you are
the holder of any Note and to each other Institutional Holder of the then
outstanding Notes (in duplicate if so specified below or otherwise
requested):
(a) Quarterly Statements. As soon as available and in any
event within 45 days after the end of each quarterly fiscal
period (except the last) of each fiscal year, copies of:
(1) a consolidated balance sheet of the Company and
its Subsidiaries as of the close of such quarterly fiscal
period, setting forth in comparative form the consolidated
figures for the fiscal year then most recently ended,
(2) a consolidated statement of income of the Company
and its Subsidiaries for such quarterly fiscal period and
for the portion of the fiscal year ending with such
quarterly fiscal period, setting forth in comparative form
the consolidated figures for the corresponding periods of
the preceding fiscal year, and
(3) a consolidated statement of cash flows of the
Company and its Subsidiaries for the portion of the fiscal
year ending with such quarterly fiscal period, setting forth
in comparative form the consolidated figures for the
corresponding period of the preceding fiscal year, all in
reasonable detail and certified as complete and correct by
an authorized financial officer of the Company, subject to
changes resulting from year-end adjustments;
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(b) Annual Statements. As soon as available and in any
event within 90 days after the close of each fiscal year of the
Company, copies of:
(1) a consolidated balance sheet of the Company and
its Subsidiaries as of the close of such fiscal year, and
(2) consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries
for such fiscal year, in each case setting forth in
comparative form the consolidated figures for the preceding
fiscal year, all in reasonable detail and accompanied by a
report thereon of a firm of independent public accountants
of recognized national standing selected by the Company to
the effect that the consolidated financial statements
present fairly, in all material respects, the consolidated
financial position of the Company and its Subsidiaries as of
the end of the fiscal year being reported on and the
consolidated results of the operations and cash flows for
said year in conformity with GAAP (except for changes
disclosed in such financial statements and concurred in by
such independent public accountants) and that the
examination of such accountants in connection with such
financial statements has been conducted in accordance with
generally accepted auditing standards and included such
tests of the accounting records and such other auditing
procedures as said accountants deemed necessary in the
circumstances;
(c) Audit Reports. Promptly upon receipt thereof, one copy
of each interim or special audit made by independent accountants
of the financial accounts of the Company or any Subsidiary;
(d) SEC and Other Reports. Promptly upon their becoming
available, one copy of each financial statement, report, notice
or proxy statement sent by the Company to its creditors and
stockholders generally and of each regular or periodic report,
and any registration statement or prospectus filed by the Company
or any Subsidiary with any securities exchange or the Securities
and Exchange Commission or any successor agency, and copies of
any orders in any proceedings to which the Company or any of its
Subsidiaries is a party, issued by any governmental agency,
Federal or state, having jurisdiction over the Company or any of
its Subsidiaries;
(e) ERISA Reports. Promptly upon the occurrence thereof,
written notice of (1) a Reportable Event with respect to any
Plan; (2) the institution of any steps by the Company, any ERISA
Affiliate, the PBGC or any other Person to terminate any Plan if
such termination is reasonably likely to result in liability of
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the Company or any Subsidiary to PBGC or any Plan in excess of
$100,000; (3) the institution of any steps by the Company or any
ERISA Affiliate to withdraw from any Plan which could result in
withdrawal liability (under Part 1 of Subtitle E of Title IV of
ERISA) in excess of $100,000; (4) a non-exempt "prohibited
transaction" within the meaning of Section 406 of ERISA in
connection with any Plan which could result in a liability
aggregating in excess of $100,000; (5) any material increase in
the contingent liability of the Company or any Subsidiary with
respect to any post-retirement welfare liability; or (6) the
taking of any action by, or the threatening of the taking of any
action by, the Internal Revenue Service, the Department of Labor
or the PBGC with respect to any of the foregoing;
(f) Officer's Certificates. Within the periods provided in
paragraphs (a) and (b) above, a certificate of the chief
financial officer or treasurer of the Company stating that such
officer has reviewed the provisions of this Agreement and setting
forth: (1) the information and computations (in sufficient
detail) required in order to establish whether the Company was in
compliance with the requirements of Section 5.6 through 5.10 at
the end of the period covered by the financial statements then
being furnished, and (2) whether there existed as of the date of
such financial statements and whether, to the best of such
officer's knowledge, there exists on the date of the certificate
or existed at any time during the period covered by such
financial statements any Default or Event of Default and, if any
such condition or event exists on the date of the certificate,
specifying the nature and period of existence thereof and the
action the Company is taking and proposes to take with respect
thereto;
(g) Accountant's Certificates. Within the period provided
in paragraph (b) above, a certificate of the accountants who
render an opinion with respect to such financial statements,
stating that they have reviewed this Agreement and stating
further whether, in making their audit, such accountants have
become aware of any Default or Event of Default under any of the
terms or provisions of this Agreement insofar as any such terms
or provisions pertain to or involve accounting matters or
determinations, and if any such condition or event then exists,
specifying the nature and period of existence thereof;
(h) Rule 144A. Except at such times as the Company is a
reporting company under Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, or has complied with the
requirements for the exemption from registration under the
Securities and Exchange Act of 1934, as amended, set forth in
Rule 12g3-2(b) under such Act, such financial or other
information as may be required under Rule 144A promulgated under
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the Act in order to establish an exemption from the registration
of the Notes in connection with the transfer or resale by it of
the Notes, in any such case promptly after the same is requested;
and
(i) Requested Information. With reasonable promptness,
such other data and information as you or any such Institutional
Holder may reasonably request if the request is limited to
matters reasonably deemed by you or such Institutional Holder to
be relevant to your or such Institutional Holder's investment in
the Notes.
Without limiting the foregoing, the Company will permit you, so long
as you are the holder of any Note, and each Institutional Holder of the
then outstanding Notes (or such Persons as either you or such Institutional
Holder may designate), to visit and inspect, after giving the Company
reasonable notice of and the opportunity to accompany you on such
visitation or inspection, any of the properties of the Company or any
Subsidiary, to examine all of their books of account, records, reports and
other papers, to make copies and extracts therefrom and to discuss their
respective affairs, finances and accounts with their respective officers,
employees, and independent public accountants (and by this provision the
Company authorizes said accountants to discuss with you the finances and
affairs of the Company and its Subsidiaries), all at such reasonable times
and as often as may be reasonably requested, if the request is limited to
matters reasonably deemed by you or such Institutional Holder to be
relevant to your or such Institutional Holder's investment in the Notes.
Any visitation shall be at the sole expense of you or such Institutional
Holder, unless a Default or Event of Default shall have occurred and be
continuing or the holder of any Note or of any other evidence of Debt of
the Company or any Subsidiary gives any written notice or takes any other
action with respect to a claimed default, in which case, any such
visitation or inspection shall be at the sole expense of the Company.
Section 6. Events of Default and Remedies Therefor.
Section 6.1. Events of Default. Any one or more of the following
shall constitute an "Event of Default" as such term is used herein:
(a) Default shall occur in the payment of interest on any
Note when the same shall have become due and such default shall
continue for more than 5 days; or
(b) Default shall occur in the making of any required
prepayment on any of the Notes as provided in Section 2.1; or
(c) Default shall occur in the making of any other payment
of the principal of any Note or Make-Whole Amount thereon at the
expressed or any accelerated maturity date or at any date fixed
for prepayment; or
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(d) Default shall occur in the observance or performance of
any covenant or agreement contained in Section 5.6 through
Section 5.8 and Section 5.10; or
(e) Default shall occur in the observance or performance of
any other provision of this Agreement which is not remedied
within 30 days after the earlier of (1) the day on which a
Responsible Officer of the Company first obtains knowledge of
such default, or (2) the day on which written notice thereof is
given to the Company by the holder of any Note; or
(f) Default or defaults shall be made in the payment when
due (whether by lapse of time, by declaration, by call for
redemption or otherwise) of the principal of or interest on any
Debt for borrowed money (other than the Notes) of the Company or
any Subsidiary aggregating at least $5,000,000 in principal
amount outstanding, and such default shall continue beyond the
period of grace, if any, allowed with respect thereto and shall
not have been cured or waived; or
(g) Default or defaults or the happening of any events
(other than defaults of the type described in clause (f) of this
Section 6.1) shall occur under any indentures, agreements or
other instruments under which any Debt for borrowed money (other
than the Notes) of the Company or any Subsidiary aggregating at
least $5,000,000 in principal amount outstanding, and such
default or defaults or events shall result in the acceleration of
the maturity of the Debt for borrowed money of the Company or any
Subsidiary outstanding thereunder; or
(h) Any representation or warranty made by the Company
herein, or made by the Company in any statement or certificate
furnished by the Company in connection with the consummation of
the issuance and delivery of the Notes or furnished by the
Company pursuant hereto, is untrue in any material respect as of
the date of the issuance or making thereof; or
(i) Final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 is or are outstanding against
the Company or any Subsidiary or against any property or assets
of either and such judgments remain unpaid, unvacated, unbonded
or unstayed by appeal or otherwise for a period of 45 days from
the date of entry; or
(j) A custodian, liquidator, trustee or receiver is
appointed for the Company or any Material Subsidiary or for the
major part of the property of either and is not discharged within
60 days after such appointment; or
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(k) The Company or any Material Subsidiary becomes
insolvent or bankrupt, is generally not paying its debts as they
become due or makes an assignment for the benefit of creditors,
or the Company or any Material Subsidiary applies for or consents
to the appointment of a custodian, liquidator, trustee or
receiver for the Company or such Material Subsidiary or for the
major part of the property of either; or
(l) Bankruptcy, reorganization, arrangement or insolvency
proceedings, or other proceedings for relief under any bankruptcy
or similar law or laws for the relief of debtors, are instituted
by or against the Company or any Material Subsidiary and, if
instituted against the Company or any Material Subsidiary, are
consented to or are not dismissed within 60 days after such
institution.
Section 6.2. Notice to Holders. When any Event of Default described
in the foregoing Section 6.1 has occurred, or if the holder of any Note or
of any other evidence of Debt for borrowed money of the Company gives any
notice or takes any other action with respect to a claimed default, the
Company agrees to give notice within three Business Days of such event to
all holders of the Notes then outstanding.
Section 6.3. Acceleration of Maturities. When any Event of Default
described in paragraph (a), (b) or (c) of Section 6.1 has happened and is
continuing, any holder of any Note may, by notice in writing sent to the
Company in the manner provided in Section 9.6, declare the entire principal
and all interest accrued on such Note to be, and such Note shall thereupon
become forthwith due and payable, without any presentment, demand, protest
or other notice of any kind, all of which are hereby expressly waived.
When any Event of Default described in paragraphs (a) through (i),
inclusive, of said Section 6.1 has happened and is continuing, the holder
or holders of 51% or more of the principal amount of the Notes at the time
outstanding may, by notice in writing to the Company in the manner provided
in Section 9.6, declare the entire principal and all interest accrued on
all Notes to be, and all Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived. When any Event of Default
described in paragraph (j), (k) or (l) of Section 6.1 has occurred, then
all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes becoming due and
payable as a result of any Event of Default as aforesaid, the Company will
forthwith pay to the holders of the Notes the entire principal and interest
accrued on the Notes and, to the extent not prohibited by applicable law,
an amount as liquidated damages for the loss of the bargain evidenced
hereby (and not as a penalty) equal to the Make-Whole Amount, determined as
of the date on which the Notes shall so become due and payable. No course
of dealing on the part of the holder or holders of any Notes nor any delay
or failure on the part of any holder of Notes to exercise any right shall
operate as a waiver of such right or otherwise prejudice such holder's
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rights, powers and remedies. The Company further agrees, to the extent
permitted by law, to pay to the holder or holders of the Notes all costs
and expenses incurred by them in the collection of any Notes upon any
default hereunder or thereon, including reasonable compensation to such
holder's or holders' attorneys for all services rendered in connection
therewith.
Section 6.4. Rescission of Acceleration. The provisions of Section
6.3 are subject to the condition that if the principal of and accrued
interest on all or any outstanding Notes have been declared immediately due
and payable by reason of the occurrence of any Event of Default described
in paragraphs (a) through (i), inclusive, of Section 6.1, the holders of
66-2/3% in aggregate principal amount of the Notes then outstanding may, by
written instrument filed with the Company, rescind and annul such
declaration and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree has been entered for the payment
of any monies due pursuant to the Notes or this Agreement;
(b) all arrears of interest upon all the Notes and all
other sums payable under the Notes and under this Agreement
(except any principal, interest or Make-Whole Amount on the Notes
which has become due and payable solely by reason of such
declaration under Section 6.3) shall have been duly paid; and
(c) each and every other Default and Event of Default shall
have been made good, cured or waived pursuant to Section 7.1;
and provided further, that no such rescission and annulment
shall extend to or affect any subsequent Default or Event of
Default or impair any right consequent thereto.
Section 7. Amendments, Waivers and Consents.
Section 7.1. Consent Required. Any term, covenant, agreement or
condition of this Agreement may, with the consent of the Company, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the
Company shall have obtained the consent in writing of the holders of at
least 66-2/3% in aggregate principal amount of outstanding Notes; provided
that without the written consent of the holders of all of the Notes then
outstanding, no such amendment or waiver shall be effective (a) which will
change the time of payment (including any prepayment required by Section
2.1) of the principal of or the interest on any Note or change the
principal amount thereof or change the rate of interest thereon, or
(b) which will change any of the provisions with respect to optional
prepayments, or (c) which will change the percentage of holders of the
Notes required to consent to any such amendment or waiver of any of the
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provisions of Section 5.13, this Section 7 or Section 6, or (d) which will
change the definition of any of the terms listed in Section 8.1.
Section 7.2. Solicitation of Holders. So long as there are any Notes
outstanding, the Company will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of
this Agreement or the Notes unless each holder of Notes (irrespective of
the amount of Notes then owned by it) shall be informed thereof by the
Company and shall be afforded the opportunity of considering the same and
shall be supplied by the Company with sufficient information to enable it
to make an informed decision with respect thereto. The Company will not,
directly or indirectly, pay or cause to be paid any remuneration, whether
by way of supplemental or additional interest, fee or otherwise, to any
holder of Notes as consideration for or as an inducement to entering into
by any holder of Notes of any waiver or amendment of any of the terms and
provisions of this Agreement or the Notes, unless such remuneration is
concurrently offered and paid, on the same terms, ratably to the holders of
all Notes then outstanding, regardless of whether each such holder has
consented to such waiver or amendment. Promptly and in any event within
30 days of the date of execution and delivery of any such waiver or
amendment, the Company shall provide a true, correct and complete copy
thereof to each of the holders of the Notes.
Section 7.3. Effect of Amendment or Waiver. Any such amendment or
waiver shall apply equally to all of the holders of the Notes and shall be
binding upon them, upon each future holder of any Note and upon the
Company, whether or not such Note shall have been marked to indicate such
amendment or waiver. No such amendment or waiver shall extend to or affect
any obligation not expressly amended or waived or impair any right
consequent thereon.
Section 8. Interpretation of Agreement; Definitions.
Section 8.1. Definitions. Unless the context otherwise requires, the
terms hereinafter set forth when used herein shall have the following
meanings and the following definitions shall be equally applicable to both
the singular and plural forms of any of the terms herein defined:
"Affiliate" shall mean any Person (other than a Wholly-owned
Subsidiary):
(a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with, the Company,
(b) which beneficially owns or holds 5% or more of any class
of the Voting Stock of the Company, or
(c) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity
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interest) of which is beneficially owned or held by the Company
or a Subsidiary. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise;
provided, that the term "Affiliate" shall not include the ▇▇▇▇▇▇▇
Fund Inc. or the Dimensional Fund Advisors, Inc. so long as each
such entity holds less than 10% of the Voting Stock of the
Company or a Subsidiary.
"Binding Commitment" shall mean, with respect to the acquisition of
any assets, a binding agreement, in writing, between the Company and the
seller of the subject assets pursuant to which the Company agrees to
purchase certain assets owned by the seller for a specified price and on a
specified date, which date shall not be more than 60 days following the
date such agreement is entered into.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which banks in New York, New York or Detroit, Michigan are
required by law to close or are customarily closed.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is either:
(a) required to be capitalized on a consolidated balance
sheet of the lessee and its subsidiaries in accordance with GAAP
or
(b) required to be disclosed as a capitalized lease in any
notes accompanying any financial statements in accordance with
GAAP both as to the amount of the related asset and the related
liability.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate Rentals due and to
become due under all Capitalized Leases under which such Person is a lessee
would be reflected as a liability on a consolidated balance sheet of such
Person.
"Change of Control" shall have the meaning set forth in Section
2.3(a).
"Change of Control Delayed Prepayment Date" shall have the meaning set
forth in Section 2.3(b).
"Change of Control Prepayment Date" shall have the meaning set forth
in Section 2.3(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
the regulations from time to time promulgated thereunder.
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"Company" shall mean Wolverine World Wide, Inc., a Delaware
corporation, and any Person who succeeds to all, or substantially all, of
the assets and business of Wolverine World Wide, Inc.
"Company Notice" shall have the meaning set forth in Section 2.3(a).
"Competitor" shall mean any Person which is substantially engaged in
the business of the manufacture or marketing of footwear, provided that:
(a) the provision of investment advisory services by a
Person to a Plan which is owned or controlled by a Person which
would otherwise be a Competitor shall not of itself cause the
Person providing such services to be deemed to be a Competitor;
(b) in no event shall an Institutional Holder be deemed a
Competitor unless such Institutional Holder controls, or is
controlled by, or is under common control with, a Person that is
substantially engaged in the business of the manufacture or
marketing of footwear; and
(c) an Institutional Holder that would otherwise be deemed
a Competitor pursuant to the foregoing provisions of this
definition by virtue of its ownership or control as a portfolio
investment of the equity securities of any Person engaged in the
business of the manufacture or marketing of footwear shall not be
deemed a Competitor if such Institutional Holder has established
procedures which will prevent confidential information supplied
to such Institutional Holder by the Company from being
transmitted or otherwise made available to such Person.
"Consolidated Adjusted Net Worth" shall mean, as of the date of any
determination thereof, the aggregate amount of stockholders' equity,
preferred stock and Minority Interests of the Company and its Subsidiaries
set forth in the most recent quarterly or annual consolidated financial
statements of the Company and its Subsidiaries reduced by the positive
amount, if any, by which the aggregate amount of all Intangible Assets
acquired by the Company and its Subsidiaries after the Closing Date and
carried in accordance with GAAP on the most recent audited financial
accounts of the Company and its Subsidiaries on a consolidated basis
exceeds 5% of Consolidated Total Assets set forth in such financial
statements.
"Consolidated Funded Debt" shall mean all Funded Debt of the Company
and its Subsidiaries, determined on a consolidated basis eliminating
intercompany items.
"Consolidated Net Earnings" for any period shall mean the gross
revenues of the Company and its Subsidiaries for such period less all
expenses and other proper charges (including taxes on income), determined
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on a consolidated basis after eliminating earnings or losses attributable
to outstanding Minority Interests, but excluding in any event:
(a) any gains or losses on the sale or other disposition of
Investments or fixed or capital assets, and any taxes on such
excluded gains and any tax deductions or credits on account of
any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings and losses of any Subsidiary accrued prior
to the date it became a Subsidiary;
(d) net earnings and losses of any corporation (other than
a Subsidiary), substantially all the assets of which have been
acquired in any manner by the Company or any Subsidiary, realized
by such corporation prior to the date of such acquisition;
(e) net earnings and losses of any corporation (other than
a Subsidiary) with which the Company or a Subsidiary shall have
consolidated or which shall have merged into or with the Company
or a Subsidiary prior to the date of such consolidation or
merger;
(f) net earnings of any business entity (other than a
Subsidiary) in which the Company or any Subsidiary has an
ownership interest unless such net earnings shall have actually
been received by the Company or such Subsidiary in the form of
cash distributions;
(g) any portion of the net earnings of any Subsidiary which
for any reason is unavailable for payment of dividends to the
Company or any other Subsidiary;
(h) earnings resulting from any reappraisal, revaluation or
write-up of assets;
(i) any deferred or other credit representing any excess of
the equity in any Subsidiary at the date of acquisition thereof
over the amount invested in such Subsidiary;
(j) any gain arising from the acquisition of any Securities
of the Company or any Subsidiary;
(k) any reversal of any contingency reserve, except to the
extent that provision for such contingency reserve shall have
been made from income arising during such period; and
(l) any other extraordinary gain.
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"Consolidated Total Assets" shall mean as of the date of any
determination thereof, total assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof, the sum of (a) Consolidated Funded Debt plus
(b) Consolidated Adjusted Net Worth.
"Current Management Group" shall have the meaning set forth in Section
2.3(a).
"Debt" of any Person shall mean and include all obligations of such
Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all:
(a) obligations of such Person for borrowed money or which
have been incurred in connection with the acquisition of property
or assets,
(b) obligations secured by any Lien upon property or assets
owned by such Person, even though such Person has not assumed or
become liable for the payment of such obligations,
(c) obligations created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement
in the event of default are limited to repossession or sale of
property,
(d) Capitalized Rentals and
(e) Guaranties of obligations of others of the character
referred to in this definition.
Debt of the Company and its Subsidiaries shall be determined on a
consolidated basis after eliminating intercompany items. In no event shall
Debt include Unfunded Pension Liability of the Plans of the Company and its
Subsidiaries which amount, as of December 31, 1993, is reflected on
Schedule II hereto.
"Default" shall mean any event or condition the occurrence of which
would, with the lapse of time or the giving of notice, or both, constitute
an Event of Default.
"Environmental Law" shall mean any international, federal, state or
local statute, law, regulation, order, consent decree, judgment, permit,
license, code, legally binding covenant or deed restriction, common law,
treaty, convention, ordinance or other requirement relating to public
health, safety or the environment, including, without limitation, those
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relating to releases, discharges or emissions to air, water, land or
groundwater, to the withdrawal or use of groundwater, to the use and
handling of polychlorinated biphenyls or asbestos, to the disposal,
treatment, storage or management of hazardous or solid waste, or Hazardous
Substances or crude oil, or any fraction thereof, or to exposure to toxic
or hazardous materials, to the handling, transportation, discharge or
release of gaseous or liquid Hazardous Substances and any regulation,
order, notice or demand validly issued pursuant to such law, statute or
ordinance, in each case applicable to the property of the Company and its
Subsidiaries or the operation, construction or modification of any thereof,
including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
by the Superfund Amendments and Reauthorization Act of 1986, the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and the Hazardous and Solid Waste Amendments of 1984, the
Hazardous Materials Transportation Act, as amended, the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1976, the Safe
Drinking Water Control Act, the Clean Air Act of 1966, as amended, the
Toxic Substances Control Act of 1976, the Occupational Safety and Health
Act of 1977, as amended, the Emergency Planning and Community Right-to-Know
Act of 1986, the National Environmental Policy Act of 1975, the Oil
Pollution Act of 1990 and any similar or implementing state law, and any
state statute and any further amendments to these laws providing for
financial responsibility for cleanup or other actions with respect to the
release or threatened release of Hazardous Substances or crude oil, or any
fraction thereof, and all rules, regulations, guidance documents and
publications promulgated thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA shall be construed to also refer to
any successor sections.
"ERISA Affiliate" shall mean any corporation, trade or business that
is, along with the Company, a member of a controlled group of corporations
or a controlled group of trades or businesses, as described in
section 414(b) and 414(c), respectively, of the Code or Section 4001 of
ERISA.
"Event of Default" shall have the meaning set forth in Section 6.1.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (a) all Rentals (other than Rentals on Capitalized Leases) payable
during such period by the Company and its Subsidiaries, and (b) all
Interest Expense on all Debt (including the interest component of Rentals
on Capitalized Leases) of the Company and its Subsidiaries.
"Funded Debt" of any Person shall mean (a) all Debt of such Person for
borrowed money or which has been incurred in connection with the
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acquisition of assets in each case having a final maturity of more than one
year from the date of origin thereof (or which is renewable or extendible
at the option of the obligor for a period or periods more than one year
from the date of origin), including all payments in respect thereof that
are required to be made within one year from the date of any determination
of Funded Debt, whether or not the obligation to make such payments shall
constitute a current liability of the obligor under GAAP, (b) all
Capitalized Rentals of such Person, (c) all Guaranties by such Person of
Funded Debt of others, and (d) Unfunded Pension Liability of the Plans of
the Company and its Subsidiaries to the extent such liabilities exceed 10%
of Consolidated Adjusted Net Worth as of the date of any determination of
Funded Debt hereunder. "Funded Debt" shall not include Debt of such Person
outstanding under any credit line, revolving credit or similar agreement
which Debt is fully paid (and not refinanced) for a period of not less than
30 consecutive days in the immediately preceding twelve calendar month
period pursuant to the terms of such agreement; provided, that at the time
of or as a result of the making of any such payment, no Default or Event of
Default shall have occurred and be continuing at any time during such 30
consecutive day period.
"GAAP" shall mean generally accepted accounting principles at the
time.
"Group" shall have the meaning set forth in Section 2.3(a).
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing, or in effect
guaranteeing, any Debt, dividend or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person:
(a) to purchase such Debt or obligation or any property or
assets constituting security therefor,
(b) to advance or supply funds (1) for the purchase or
payment of such Debt or obligation, or (2) to maintain working
capital or any balance sheet or income statement condition or
otherwise to advance or make available funds for the purchase or
payment of such Debt or obligation,
(c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the
owner of such Debt or obligation of the ability of the primary
obligor to make payment of the Debt or obligation, or
(d) otherwise to assure the owner of the Debt or obligation
of the primary obligor against loss in respect thereof. For the
purposes of all computations made under this Agreement, a
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Guaranty in respect of any Debt for borrowed money shall be
deemed to be Debt equal to the principal amount of such Debt for
borrowed money which has been guaranteed, and a Guaranty in
respect of any other obligation or liability or any dividend
shall be deemed to be Debt equal to the maximum aggregate amount
of such obligation, liability or dividend.
"Hazardous Substance" shall mean any hazardous or toxic material,
substance or waste, pollutant or contaminant which is regulated under any
statute, law, ordinance, rule or regulation of any local, state, regional
or federal authority having jurisdiction over the property of the Company
and its Subsidiaries or its use, including but not limited to any material,
substance or waste which is:
(a) defined as a hazardous substance under Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. Section 1317),
as amended;
(b) regulated as a hazardous waste under Section 1004 or
Section 3001 of the Federal Solid Waste Disposal Act, as amended
by the Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et seq.), as amended;
(c) defined as a hazardous substance under Section 101 of
the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. Section 9601 et seq.), as amended; or
(d) defined or regulated as a hazardous substance or
hazardous waste under any rules or regulations promulgated under
any of the foregoing statutes.
"Hush Puppies Canada" shall mean Hush Puppies Canada Footwear, Ltd., a
Canadian corporation and Subsidiary of the Company.
"Hush Puppies Canada Credit Facilities" shall mean the short-term
credit facilities established by that certain letter agreement dated
August 2, 1993 between Hush Puppies Canada and the Bank of Montreal, and
any renewal, extension or replacement thereof.
"Institutional Holder" shall mean any of the following Persons:
(a) any bank, savings and loan association, savings
institution, trust company or national banking association,
acting for its own account or in a fiduciary capacity,
(b) any insurance company,
(c) any fraternal benefit society,
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(d) any pension, retirement or profit-sharing trust or fund
within the meaning of Title I of ERISA or for which any bank,
trust company, national banking association or investment adviser
registered under the Investment Advisers Act of 1940, as amended,
is acting as trustee or agent,
(e) any investment company or business development company,
as defined in the Investment Company Act of 1940, as amended,
(f) any broker or dealer registered under the Securities
Exchange Act of 1934, as amended, or any investment adviser
registered under the Investment Adviser Act of 1940, as amended,
(g) any government, any public employees' pension or
retirement system, or any other government agency supervising the
investment of public funds,
(h) any other entity all of the equity owners of which are
Institutional Holders,
(i) any other Person which may be within the definition of
"qualified institutional buyer" as such term is used in Rule
144A, as from time to time in effect, promulgated under the
Securities Act of 1933, as amended or
(j) any other Person (other than a natural person) which may
be within the definition of "accredited investor" as such term is
used in section 2 of the Securities Act of 1933, as amended, and
in Rule 215 promulgated under the Securities Act of 1933, as
amended.
"Intangible Assets" of any Person shall mean, as of the date of any
determination thereof, the total amount of all assets of such Person
consisting of goodwill, patents, trademarks, trade names, copyrights,
franchises, experimental expense, and such other assets as are properly
classified as "intangible assets" in accordance with GAAP.
"Interest Expense" for any period shall mean all interest and all
amortization of debt discount and expense on any particular Debt
(including, without limitation, payment-in-kind, zero coupon and other like
Securities) for which such calculations are being made. Computations of
Interest Expense on a pro forma basis for Debt having a variable interest
rate shall be calculated at the rate in effect on the date of any
determination.
"Investments" shall mean all investments, in cash or by delivery of
property, made directly or indirectly in any Person, whether by acquisition
of shares of capital stock, Debt or other obligations or Securities or by
loan, advance, capital contribution or otherwise; provided that
-34-
"Investments" shall not mean or include routine investments in property to
be used or consumed in the ordinary course of business.
"Lien" shall mean any interest in property securing an obligation owed
to, or a claim by, a Person other than the owner of the property, whether
such interest is based on the common law, statute or contract, and
including but not limited to the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes. The term "Lien"
shall include reservations, exceptions, encroachments, easements, rights-
of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances (including, with respect to stock, stockholder
agreements, voting trust agreements, buy-back agreements and all similar
arrangements) affecting property. For the purposes of this Agreement, the
Company or a Subsidiary shall be deemed to be the owner of any property
which it has acquired or holds subject to a conditional sale agreement,
Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"Make-Whole Amount" shall mean in connection with any prepayment or
acceleration of the Notes the excess, if any, of (a) the aggregate present
value as of the date of such prepayment or payment of each dollar of
principal being prepaid or paid (taking into account the application of
such prepayment or payment required by Section 2.1) and the amount of
interest (exclusive of interest accrued to the date of prepayment or
payment) that would have been payable in respect of such dollar if such
prepayment or payment had not been made, determined by discounting such
amounts at the Reinvestment Rate from the respective dates on which they
would have been payable, over (b) 100% of the principal amount of the
outstanding Notes being prepaid or paid. If the Reinvestment Rate is equal
to or higher than 7.81%, the Make-Whole Amount shall be zero. For purposes
of any determination of the Make-Whole Amount:
"Reinvestment Rate" shall mean (1) the sum of 0.50%, plus
the yield reported on page "USD" of the Bloomberg Financial
Markets Services Screen (or, if not available, any other
nationally recognized trading screen reporting on-line intraday
trading in the United States government Securities) at 11:00 A.M.
(New York, New York time) for the United States government
Securities having a maturity (rounded to the nearest month)
corresponding to the remaining Weighted Average Life to Maturity
of the principal being prepaid or paid (taking into account the
application of such prepayment or payment required by Section
2.1) or (2) in the event that no nationally recognized trading
screen reporting on-line intraday trading in the United States
government Securities is available, Reinvestment Rate shall mean
the sum of 0.50%, plus the arithmetic mean of the yields for the
two columns under the heading "Week Ending" published in the
Statistical Release under the caption "Treasury Constant
-35-
Maturities" for the maturity (rounded to the nearest month)
corresponding to the Weighted Average Life to Maturity of the
principal being prepaid or paid (taking into account the
application of such prepayment or payment required by Section
2.1). If no maturity exactly corresponds to such Weighted
Average Life to Maturity, yields for the two published maturities
most closely corresponding to such Weighted Average Life to
Maturity shall be calculated pursuant to the immediately
preceding sentence and the Reinvestment Rate shall be
interpolated or extrapolated by reference to the above-mentioned
trading screen from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month.
For the purposes of calculating the "Reinvestment Rate", the most
recent Statistical Release published prior to the date of
determination of the Make-Whole Amount shall be used.
"Statistical Release" shall mean the then most recently
published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Federal
Reserve System and which establishes yields on actively traded
U.S. Government Securities adjusted to constant maturities or, if
such statistical release is not published at the time of any
determination hereunder, then such other reasonably comparable
index which shall be designated by the holders of 66-2/3% in
aggregate principal amount of the outstanding Notes.
"Weighted Average Life to Maturity" of the principal amount
of the Notes being prepaid or paid shall mean, as of the time of
any determination thereof, the number of years obtained by
dividing the then Remaining Dollar-Years of such principal by the
aggregate amount of such principal. The term "Remaining Dollar-
Years" of such principal shall mean the amount obtained by
(1) multiplying (i) the remainder of (A) the amount of principal
that would have become due on each scheduled payment date if such
prepayment or payment had not been made, less (B) the amount of
principal on the Notes scheduled to become due on such date after
giving effect to such prepayment or payment and the application
thereof in accordance with the provisions of Section 2.1, by
(ii) the number of years (calculated to the nearest one-twelfth)
which will elapse between the date of determination and such
scheduled payment date, and (2) totalling the products obtained
in (1).
"Material Subsidiary" shall mean any Subsidiary if:
(1) The assets of such Subsidiary (valued at the greater of
book or fair market) as at the end of the immediately preceding
fiscal year exceed 5% of Consolidated Total Assets;
-36-
(2) The aggregate sum of all assets (valued at the greater
of book or fair market) of such Subsidiary, when combined with
the assets of all other Subsidiaries to which subclauses (j), (k)
or (l) of Section 6.1 hereof would have applied if not for the
limitations set forth herein during the three-year period
immediately preceding the date of such determination, exceeds 5%
of Consolidated Total Assets; or
(3) The sum of the portions of Consolidated Net Earnings of
the Company and its Subsidiaries which were contributed by such
Subsidiary during the immediately preceding fiscal year exceeds
5% of Consolidated Net Earnings.
"Minority Interests" shall mean any shares of stock of any class of a
Subsidiary (other than directors' qualifying shares as required by law)
that are not owned by the Company and/or one or more of its Subsidiaries.
Minority Interests shall be valued by valuing Minority Interests
constituting preferred stock at the voluntary or involuntary liquidating
value of such preferred stock, whichever is greater, and by valuing
Minority Interests constituting common stock at the book value of capital
and surplus applicable thereto adjusted, if necessary, to reflect any
changes from the book value of such common stock required by the foregoing
method of valuing Minority Interests in preferred stock.
"Multiemployer Plan" shall have the same meaning as in ERISA.
"Net Earnings Available for Fixed Charges" for any period shall mean
the sum of (a) Consolidated Net Earnings during such period plus (to the
extent deducted in determining Consolidated Net Earnings), (b) all
provisions for any Federal, state or other income taxes made by the Company
and its Subsidiaries during such period and (c) Fixed Charges of the
Company and its Subsidiaries during such period.
"Noteholder Notice" shall have the meaning set forth in Section
2.3(a).
"Overdue Rate" shall mean the lesser of (a) the maximum interest rate
permitted by law and (b) the greater of (1) 9.81% per annum and (2) the
rate which ▇▇▇▇▇▇ Guaranty Trust Company of New York announces from time to
time as its prime lending rate as in effect from time to time, plus 2%.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, and a government or agency or political
subdivision thereof.
"Plan" shall mean a "pension plan," as such term is defined in ERISA,
established or maintained by the Company or any ERISA Affiliate or as to
-37-
which the Company or any ERISA Affiliate contributed or is a member or
otherwise may have any liability, other than a Multiemployer Plan.
"Priority Debt" shall mean and include, as of the date of any
determination, the sum of (a) Funded Debt of Subsidiaries plus (but without
duplication) (b) Funded Debt of the Company or any Subsidiary secured by a
Lien permitted under Section 5.9(a)(9) incurred after the Closing Date and
(c) Debt of Hush Puppies Canada outstanding under the Hush Puppies Canada
Credit Facilities and secured by Liens permitted under Section 5.9(a)(8).
"Purchasers" shall have the meaning set forth in Section 1.1.
"Qualified Letter of Credit" shall mean a letter of credit issued by a
bank or trust company organized under the laws of the United States or any
state thereof having capital, surplus and undivided profits aggregating at
least $100,000,000 and whose long-term certificates of deposit are, at the
time any such letter of credit is issued, rated "A" or better by Standard &
Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.
"Rentals" shall mean and include as of the date of any determination
thereof all fixed payments (including as such all payments which the lessee
is obligated to make to the lessor on termination of the lease or surrender
of the property) payable by the Company or a Subsidiary, as lessee or
sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by the Company or a Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes and similar charges.
"Reportable Event" shall mean a "reportable event" as described in
Section 4043 of ERISA for which the notice requirement to the PBGC has not
been waived (provided that the loss of qualification of a Plan and the
failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA shall be a Reportable Event regardless of the issuance
of any waiver of the reporting requirement by the PBGC).
"Responsible Officer" shall mean the President, the Chief Executive
Officer, the Chief Financial Officer or the Treasurer of the Company.
"Security" shall have the same meaning as in Section 2(1) of the Securities
Act of 1933, as amended.
"Senior Debt" shall mean and include the Notes and all other
outstanding Debt of the Company which is not expressed to be junior or
subordinate to any other Debt of the Company.
The term "subsidiary" shall mean as to any particular parent
corporation any corporation of which more than 50% (by number of votes) of
the Voting Stock shall be beneficially owned, directly or indirectly, by
such parent corporation. The term "Subsidiary" shall mean a subsidiary of
the Company.
-38-
"Unfunded Pension Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in
accordance with statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan, exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the
Code.
"Voting Stock" shall mean Securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(except shares required as directors' qualifying shares) and all Debt for
borrowed money shall be owned by the Company and/or one or more of its
Wholly-owned Subsidiaries.
Section 8.2. Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is required
to be made for the purposes of this Agreement, the same shall be done in
accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the requirements of this Agreement.
Section 8.3. Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether the
action in question is taken directly or indirectly by such Person.
Section 9. Miscellaneous.
Section 9.1. Registered Notes. The Company shall cause to be kept at
its principal office a register for the registration and transfer of the
Notes, and the Company will register or transfer or cause to be registered
or transferred, as hereinafter provided, any Note issued pursuant to this
Agreement.
At any time and from time to time the holder of any Note which has
been duly registered as hereinabove provided may transfer such Note upon
surrender thereof at the principal office of the Company duly endorsed or
accompanied by a written instrument of transfer duly executed by the holder
of such Note or its attorney duly authorized in writing.
The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes of this
Agreement. Payment of or on account of the principal, Make-Whole Amount
-39-
and interest on any Note shall be made to or upon the written order of such
holder.
Section 9.2. Exchange of Notes. At any time and from time to time,
upon surrender of any Note initially delivered, or of any Note substituted
therefore pursuant to Section 9.1, this Section 9.2 or Section 9.3, at its
office, the Company will deliver in exchange therefor, without expense to
such holder, except as set forth below, a Note for the same aggregate
principal amount as the then unpaid principal amount of the Note so
surrendered, or Notes in the denomination of $1,000,000 (or such lesser
amount as shall constitute 100% of the Notes of such holder) or any amount
in excess thereof as such holder shall specify, dated as of the date to
which interest has been paid on the Note so surrendered or, if such
surrender is prior to the payment of any interest thereon, then dated as of
the date of issue, registered in the name of such Person or Persons as may
be designated by such holder, and otherwise of the same form and tenor as
the Notes so surrendered for exchange. The Company may require the payment
of a sum sufficient to cover any stamp tax or governmental charge imposed
upon such exchange or transfer.
Section 9.3. Loss, Theft, Etc. of Notes. Upon receipt of evidence
satisfactory to the Company of the loss, theft, mutilation or destruction
of any Note, and in the case of any such loss, theft or destruction upon
delivery of a bond of indemnity in such form and amount as shall be
reasonably satisfactory to the Company, or in the event of such mutilation
upon surrender and cancellation of the Note, the Company will make and
deliver without expense to the holder thereof, a new Note, of like tenor,
in lieu of such lost, stolen, destroyed or mutilated Note. If the
Purchaser or any subsequent Institutional Holder having a net worth of
$50,000,000 or more is the owner of any such lost, stolen or destroyed
Note, then the affidavit of an authorized officer of such owner, setting
forth the fact of loss, theft or destruction and of its ownership of such
Note at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof and no further indemnity shall be required as
a condition to the execution and delivery of a new Note other than the
written agreement of such owner to indemnify the Company.
Section 9.4. Expenses, Stamp Tax Indemnity. Whether or not the
transactions herein contemplated shall be consummated, the Company agrees
to pay directly all of your out-of-pocket expenses in connection with the
preparation, execution and delivery of this Agreement and the transactions
contemplated hereby, including but not limited to the charges and
disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, your special counsel, duplicating and
printing costs and charges for shipping the Notes, adequately insured to
you at your home office or at such other place as you may designate, and
all such expenses relating to any amendments, waivers or consents pursuant
to the provisions hereof (whether or not the same are actually executed and
delivered), including, without limitation, any amendments, waivers, or
consents resulting from any work-out, renegotiation, restructuring or
insolvency proceeding relating to the performance by the Company of its
-40-
obligations under this Agreement and the Notes. The Company agrees that it
will pay any supplemental charges and disbursements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
no later than five Business Days from the date of presentation of an
invoice therefor subsequent to the Closing Date. Without limiting the
foregoing, the Company also agrees to pay, within five Business Days of
receipt thereof, supplemental statements of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ for
disbursements unposted or not incurred as of the Closing Date. The Company
further agrees that it will pay and save you harmless against any and all
liability with respect to stamp and other taxes, if any, which may be
payable or which may be determined to be payable in connection with the
execution and delivery of this Agreement or the Notes, whether or not any
Notes are then outstanding. The Company agrees to protect and indemnify
you against any liability for any and all brokerage fees and commissions
payable or claimed to be payable to any Person in connection with the
transactions contemplated by this Agreement. Without limiting the
foregoing, the Company agrees to pay the cost of obtaining the private
placement number for the Notes and authorizes the submission of such
information as may be required by Standard & Poor's CUSIP Service Bureau
for the purpose of obtaining such number.
Section 9.5. Powers and Rights Not Waived; Remedies Cumulative. No
delay or failure on the part of the holder of any Note in the exercise of
any power or right shall operate as a waiver thereof; nor shall any single
or partial exercise of the same preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies of the holder of any Note are cumulative to, and are not exclusive
of, any rights or remedies any such holder would otherwise have.
Section 9.6. Notices. All communications provided for hereunder
shall be in writing and, if to you, delivered or mailed prepaid by first
class mail or overnight air courier, or by facsimile communication, in each
case addressed to you at your address appearing on Schedule I to this
Agreement or such other address as you or the subsequent holder of any Note
initially issued to you may designate to the Company in writing, and if to
the Company, delivered or mailed by registered or certified mail or
overnight air courier, or by facsimile communication, to the Company at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Vice President
of Finance, or to such other address as the Company may in writing
designate to you or to a subsequent holder of the Note initially issued to
you; provided, however, that a notice to you by overnight air courier shall
only be effective if delivered to you at a street address designated for
such purpose in Schedule I, and a notice to you by facsimile communication
shall only be effective if a copy of such notice is delivered by overnight
air courier on the following day, or, in either case, as you or a
subsequent holder of any Note initially issued to you may designate to the
Company in writing; and provided, further, that so long as MIMLIC Asset
Management Company ("MIMLIC") shall serve as investment advisor for Farm
Bureau Life Insurance Company of Michigan, FB Annuity Company, Federated
Life Insurance Company and Federated Mutual Insurance Company, and until
the Company is notified that MIMLIC no longer serves as investment advisor
-41-
to any of the foregoing Purchasers or that any such Purchaser no longer
holds any Notes, the Company shall have satisfied the notice requirements
of this Section 9.6 with respect to such institutions by providing one copy
of any communications called for hereunder (including any solicitations of
holders provided for in Section 7.2) to MIMLIC at the address set forth in
Schedule I.
Section 9.7. Successors and Assigns. This Agreement shall be binding
upon the Company and its successors and assigns and shall inure to your
benefit and to the benefit of your successors and assigns, including each
successive holder or holders of any Notes.
Section 9.8. Survival of Covenants and Representations. All
covenants, representations and warranties made by the Company herein and in
any certificates delivered pursuant hereto, whether or not in connection
with the Closing Date, shall survive the closing and the delivery of this
Agreement and the Notes.
Section 9.9. Severability. Should any part of this Agreement for any
reason be declared invalid or unenforceable, such decision shall not affect
the validity or enforceability of any remaining portion, which remaining
portion shall remain in force and effect as if this Agreement had been
executed with the invalid or unenforceable portion thereof eliminated and
it is hereby declared the intention of the parties hereto that they would
have executed the remaining portion of this Agreement without including
therein any such part, parts or portion which may, for any reason, be
hereafter declared invalid or unenforceable.
Section 9.10. Governing Law. This Agreement and the Notes issued and
sold hereunder shall be governed by and construed in accordance with New
York law, without regard to principles of conflicts of laws.
Section 9.11. Jurisdiction and Service of Process. Any legal action
or proceeding with respect to any of the Agreements or the Notes or any
document related thereto may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New
York, and, by execution and delivery of this Agreement, the Company hereby
accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts.
The Company hereby irrevocably and unconditionally waives any objection,
including, without limitation, any objection to the laying of venue or
based on the grounds of forum non conveniens, which it may now or hereafter
have to the bringing of any action or proceeding in such respective
jurisdictions. The Company hereby irrevocably and unconditionally waives
trial by jury.
The Company further consents that all service of process may be made
by delivery to it at the address for the Company set forth in Section 9.6
hereof and that service so made shall be deemed to be completed upon actual
receipt. Nothing contained in this Section 9.11 shall affect the right of
-42-
any holder of a Note to serve legal process in any other manner permitted
by law or to bring any action or proceeding in the courts of any
jurisdiction against the Company, or to enforce a judgment obtained in the
courts of any other jurisdiction.
Section 9.12. Captions. The descriptive headings of the various
Sections or parts of this Agreement are for convenience only and shall not
affect the meaning or construction of any of the provisions hereof.
-43-
The execution hereof by you shall constitute a contract between us for the
uses and purposes hereinabove set forth, and this Agreement may be executed
in any number of counterparts, each executed counterpart constituting an
original but all together only one agreement.
Wolverine World Wide, Inc.
By ___________________________
Its _______________________
Accepted as of August 1, 1994.
[VARIATION]
By ___________________________
Its________________________
-44-
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
Teachers Insurance and Annuity $15,000,000
Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇, Securities
Division, Private Placement
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇ or
(▇▇▇) ▇▇▇-▇▇▇▇ (general number)
Telecopier Number: (▇▇▇) ▇▇▇-▇▇▇▇
Payments
All payments on account of the Notes shall be made in immediately available
funds at the opening of business on the due date by electronic funds
transfer through the Automated Clearing House system (identifying each
payment as "Wolverine World Wide, Inc. 7.81% Senior Notes due August 15,
2004, PPN 978097 A# 0, principal, Make-Whole Amount or interest") to:
▇▇▇▇▇▇ Guaranty Trust Company of
New York (ABA #▇▇▇▇▇▇▇▇▇)
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
For credit to: Teachers Insurance and
Annuity Association
Account Number ▇▇▇-▇▇-▇▇▇
On order of: Wolverine World Wide, Inc.
Notices
Contemporaneous with payment, written confirmation of each such payment to
be addressed as set forth below including the following information:
(1) the full name, private placement number, interest rate and maturity
date of the Notes; (2) allocation of payment between principal, interest,
Make-Whole Amount and any special payment; and (3) name and address of Bank
from which such transfer was sent to:
Teachers Insurance and Annuity Association of America
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Securities Accounting Division
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
All other notices and communications to be addressed as first provided
above.
I-1
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-2
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
The Minnesota Mutual Life Insurance $9,500,000
Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Department
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
Wolverine World Wide, Inc. 7.81% Senior Notes due August 15, 2004, PPN
978097 A# 0, principal, Make-Whole Amount or interest) to:
The First Bank National Association (ABA #▇▇▇▇▇▇▇▇▇)
Minneapolis, Minnesota
BNF The Minnesota Mutual Life Insurance Company
Account Number 1-801-10-00600-4
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-3
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
Farm Bureau Life Insurance Company $1,250,000
of Michigan
c/o MIMLIC Asset Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Wolverine World Wide, Inc., 7.81% Senior Notes due August 15, 2004,
PPN 978097 A# 0, principal or interest") to:
Comerica Bank (ABA #072-000-096)
Detroit, Michigan
credit to Account Number 21585-98530
Trust Operations Fixed Income ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
For further credit to: Farm Bureau Life Insurance Company of Michigan
Account Number 84-550
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-4
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
FB Annuity Company $1,250,000
c/o MIMLIC Asset Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Wolverine World Wide, Inc., 7.81% Senior Notes due August 15, 2004,
PPN 978097 A# 0, principal or interest") to:
Comerica Bank (ABA #072-000-096)
Detroit, Michigan
credit to Account Number 21585-98530
Trust Operations Fixed Income ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
For further credit to: FB Annuity Company
Account Number 84-553
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-5
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
Federated Life Insurance Company $1,000,000
c/o MIMLIC Asset Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Wolverine World Wide, Inc., 7.81% Senior Notes due August 15, 2004,
PPN 978097 A# 0, principal or interest") to:
Norwest Bank (ABA #▇▇▇▇▇▇▇▇▇)
Trust Department
Account Number 0840-245
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
For credit to: Federated Life Insurance Company
Account Number ▇▇▇▇▇▇▇▇
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: Tour & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-6
Principal Amount
Names and Addresses of Notes to be
of Purchasers Purchased
Federated Mutual Insurance Company $2,000,000
c/o MIMLIC Asset Management Company
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Client Administrator
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Wolverine World Wide, Inc., 7.81% Senior Notes due August 15, 2004,
PPN 978097 A# 0, principal or interest") to:
Norwest Bank (ABA #▇▇▇▇▇▇▇▇▇)
Trust Department
Account Number 0840-245
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
For credit to: Federated Mutual Insurance Company
Account Number ▇▇▇▇▇▇▇▇
Notices
All notices and communications, including notices with respect to payments
and written confirmation of each such payment, to be addressed as first
provided above.
Name of Nominee in which Notes are to be issued: Tour & Co
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
I-7
Description of Funded Debt, Liens and Unfunded Pension Liability
1. Funded Debt (including Capitalized Leases) and Liens relating thereto
of the Company and its Subsidiaries outstanding on August 1,
1994 are as follows:
Principal Final
Obligation Amount Maturity Collateral
(a) 10.4% Senior Notes 11,785,653.21 08-15-94 None
(b) 10.4% Senior Notes 10,825,935.50 08-15-94 None
(c) 6.5% Convertible
Subordinated Note 1,250,000.00 ▇▇-▇▇-▇▇ ▇▇▇▇
(▇) ▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇▇▇▇ 200,000.00 12-30-97 Land, building
County Industrial equipment and
Development Agency related property
Industrial Development located in
Revenue Bond and Sale Village of St.
Agreement under which Johnsonville,
the Company is purchasing ▇▇▇▇▇▇▇▇▇▇
the facility financed by County, New York
that Bond
(e) NBD Revolving Line of
Credit 31,000,000.00 06-30-95 None
(f) ▇▇▇▇▇▇ Shares-10% 262,536.00 06-01-94 None
(g) Guaranty of County of 240,000.00 12-01-95 Land, building
Franklin Industrial equipment and
Development Agency related property
Industrial Development located in Town-
Revenue Bonds and ship of Bombay,
Capital Lease under Franklin County
which the Company is New York
financing the facility
financed by those Bonds.
(h) Miscellaneous Funded Debt Not exceeding Various Various items of
$500,000 in the real and person-
aggregate al property of
the Company and
its Subsidiaries
SCHEDULE II
(to Note Agreement)
2. Unfunded Pension Liability of Plans of the Company and its
Subsidiaries as of December 31, 1993 are as follows:
Frolic Footwear Pension Plan had an
Unfunded Pension Liability of $18,000
on that date.
II-2
Subsidiaries of the Company
Percentage of Voting
Stock Owned by Company
Jurisdiction of and Each Other
Name of Subsidiary Incorporation Subsidiary
Aquadilla Shoe Corporation Michigan 100%
BSI Shoes, Inc.(1) Michigan 100%
▇▇▇▇▇▇ France, S.A.(1) France 100%
Dominican Wolverine Shoe
Company Limited Cayman Islands 100%
Frolic de Mexico S.A. de C.V. Monterrey, Mexico 100%
Spartan Shoe Company Limited Cayman Islands 100%
Hush Puppies Retail, Inc. Michigan 100%
WWW Europe, Ltd.(1) United Kingdom 100%
Wolverine Design Center, Inc. Michigan 100%
Wolverine Procurement, Inc. Michigan 100%
Wolverine Sourcing, Inc. Michigan 100%
Hush Puppies Canada ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ 75%
Ltd.
___________________________
(1) BSI Shoes, Inc., ▇▇▇▇▇▇ France, S.A., and WWW Europe, Ltd. are in the
process of being dissolved and liquidated. All of these entities
relate to the former ▇▇▇▇▇▇ athletic footwear business, the assets of
which were sold in January of 1993. WWW Europe, Ltd. is not and will
not be in technical good standing under applicable United Kingdom laws
and regulations.
II-3
Wolverine World Wide, Inc.
7.81% Senior Note
Due August 15, 2004
PPN 978097 A# 0
No.
____________, ____
$
Wolverine World Wide, Inc., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to
or registered assigns
on the fifteenth day of August, 2004
the principal amount of
DOLLARS ($ )
and to pay interest (computed on the basis of a 360-day year of twelve 30-
day months) on the principal amount from time to time remaining unpaid
hereon at the rate of 7.81% per annum from the date hereof until maturity,
payable semi-annually on the fifteenth of February and August in each year
(commencing on the first of such dates after the date hereof) and at
maturity. The Company agrees to pay interest on overdue principal
(including any overdue required or optional prepayment of principal) and
Make-Whole Amount and (to the extent legally enforceable) on any overdue
installment of interest, at the Overdue Rate after the due date, whether by
acceleration or otherwise, until paid. "Overdue Rate" shall mean the
lesser of (a) the maximum interest rate permitted by law and (b) the
greater of (1) 9.81% per annum and (2) the rate which ▇▇▇▇▇▇ Guaranty Trust
Company of New York announces from time to time as its prime lending rate
as in effect from time to time, plus 2%.
Both the principal hereof and interest hereon are payable at the
principal office of the Company in Rockford, Michigan in coin or currency
of the United States of America which at the time of payment shall be legal
tender for the payment of public and private debts. If any amount of
principal, Make-Whole Amount or interest on or in respect of this Note
becomes due and payable on any date which is not a Business Day, such
amount shall be payable on the immediately preceding Business Day and shall
include interest payable to and including the scheduled date due.
"Business Day" means any day other than a Saturday, Sunday or other day on
which banks in New York, New York or Detroit, Michigan are required by law
to close or are customarily closed.
EXHIBIT A
(to Note Agreement)
This Note is one of the 7.81% Senior Notes due August 15, 2004 (the
"Notes") of the Company in the aggregate principal amount of $30,000,000
issued or to be issued under and pursuant to the terms and provisions of
the separate Note Agreements, each dated as of August 1, 1994 (the "Note
Agreements"), entered into by the Company with the original Purchasers
therein referred to and this Note and the holder hereof are entitled
equally and ratably with the holders of all other Notes outstanding under
the Note Agreements to all the benefits provided for thereby or referred to
therein. Reference is hereby made to the Note Agreements for a statement
of such rights and benefits.
This Note and the other Notes outstanding under the Note Agreements
may be declared due prior to their expressed maturity dates and certain
prepayments are required to be made thereon, all in the events, on the
terms and in the manner and amounts as provided in the Note Agreements.
The Notes are not subject to prepayment or redemption at the option of the
Company prior to their expressed maturity dates except on the terms and
conditions and in the amounts and with the Make-Whole Amount set forth in
the Note Agreements.
This Note is registered on the books of the Company and is
transferable only by surrender thereof at the principal office of the
Company duly endorsed or accompanied by a written instrument of transfer
duly executed by the registered holder of this Note or its attorney duly
authorized in writing. Payment of or on account of principal, Make-Whole
Amount and interest on this Note shall be made only to or upon the order in
writing of the registered holder.
This Note and said Note Agreements are governed by and construed in
accordance with the laws of New York, without regard to principles of
conflicts of laws.
Wolverine World Wide, Inc.
By____________________________
Its_________________________
A-2
Representations and Warranties
The Company represents and warrants to you as follows:
1. Subsidiaries. Schedule II attached to the Agreements states the
name of each of the Company's Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and/or its Subsidiaries. The Company and each Subsidiary has good and
marketable title to all of the shares it purports to own of the stock of
each Subsidiary, free and clear in each case of any Lien. All such shares
have been duly issued and are fully paid and non-assessable.
2. Corporate Organization and Authority. The Company, and each
Subsidiary,
(a) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation, except that WWW Europe, Ltd., which is in the
process of being dissolved and liquidated, is not in good
standing in the United Kingdom;
(b) has all requisite power and authority and all necessary
licenses and permits to own and operate its properties and to
carry on its business as now conducted and as presently proposed
to be conducted, except for licenses and permits the failure of
which to have or obtain do not materially and adversely affect
the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries,
taken as a whole; and
(c) is duly licensed or qualified and is in good standing
as a foreign corporation in each jurisdiction in which (i) the
nature of the business transacted by it or the nature of the
property owned or leased by it makes such licensing or
qualification necessary and (ii) the failure to be so licensed
and qualified does not materially and adversely affect the
properties, business, prospects, profits or condition (financial
or otherwise) of the Company and its Subsidiaries, taken as a
whole.
3. Business and Property. You have heretofore been furnished with a
copy of the Private Placement Memorandum dated March, 1994 (the
"Memorandum") prepared by NBD Bank, N.A., Capital Markets Division, and SPP
Hambro & Co. which generally sets forth the business conducted and proposed
to be conducted by the Company and its Subsidiaries and the principal
properties of the Company and its Subsidiaries.
EXHIBIT B
(to Note Agreement)
4. Financial Statements.
(a) The consolidated balance sheets of the Company and its
consolidated Subsidiaries as of December 29, 1990, December 28,
1991, January 2, 1993 and January 1, 1994 and the statements of
income and retained earnings and changes in financial position or
cash flows for the fiscal years ended on said dates, each
accompanied by a report thereon containing an opinion unqualified
as to scope limitations imposed by the Company and otherwise
without qualification except as therein noted, by Ernst & Young,
have been prepared in accordance with GAAP consistently applied
except as therein noted, are correct and complete and present
fairly the financial position of the Company and its consolidated
Subsidiaries as of such dates and the results of their operations
and changes in their financial position or cash flows for such
periods. The unaudited consolidated balance sheets of the
Company and its consolidated Subsidiaries as of March 26, 1994,
and the unaudited statements of income and retained earnings and
cash flows for the three-month period ended on said date prepared
by the Company have been prepared in accordance with GAAP
consistently applied, are correct and complete and present fairly
the financial position of the Company and its consolidated
Subsidiaries as of said date and the results of their operations
and changes in their financial position or cash flows for such
period.
(b) Since January 1, 1994, there has been no change in the
condition, financial or otherwise, of the Company and its
consolidated Subsidiaries as shown on the consolidated balance
sheet as of such date except changes in the ordinary course of
business, none of which individually or in the aggregate has been
materially adverse.
5. Debt. Schedule II attached to the Agreements correctly describes
all Funded Debt and Capitalized Leases of the Company and its Subsidiaries
outstanding on August 1, 1994.
6. Full Disclosure. Neither the financial statements referred to in
paragraph 4 hereof nor the Agreements, the Memorandum or any other written
statement furnished by the Company to you in connection with the
negotiation of the sale of the Notes, contains any untrue statement of a
material fact or omits a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact peculiar to
the Company or its Subsidiaries which the Company has not disclosed to you
in writing which materially affects adversely nor, so far as the Company
can now reasonably foresee, will materially affect adversely the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
B-2
7. Pending Litigation. The Company has furnished to the Purchasers a
letter dated July 28, 1994 (the "Company Letter") describing certain
litigation proceedings and claims involving the Company and its
Subsidiaries. There are no proceedings pending or, to the knowledge of the
Company, threatened against or affecting the Company or any Subsidiary in
any court or before any governmental authority or arbitration board or
tribunal (including, without limitation, the matters identified in the
Company Letter) which can reasonably be expected to materially and
adversely affect the properties, business, prospects, profits or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole.
8. Title to Properties. The Company and each Subsidiary has good and
marketable title in fee simple (or its equivalent under applicable law) to
all material parcels of real property it purports to own and has good title
to all the other material items of property it purports to own, including
that reflected in the most recent balance sheet referred to in paragraph 4
hereof, except as sold or otherwise disposed of in the ordinary course of
business and except for Liens permitted by the Agreements.
9. Patents and Trademarks. The Company and each Subsidiary owns or
possesses all the patents, trademarks, trade names, service marks,
copyrights, licenses and rights with respect to the foregoing necessary for
the present and planned future conduct of its business, without any known
conflict with the rights of others except to the extent the failure to own
such properties and right does not materially and adversely affect the
properties, business, prospects, profits or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
10. Sale is Legal and Authorized. The sale of the Notes and
compliance by the Company with all of the provisions of the Agreements and
the Notes:
(a) are within the corporate powers of the Company;
(b) will not violate any provisions of any law or any order
of any court or governmental authority or agency and will not
conflict with or result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the
Certificate of Incorporation or By-laws of the Company or any
indenture or other agreement or instrument to which the Company
is a party or by which it may be bound or result in the
imposition of any Liens on any property of the Company; and
(c) have been duly authorized by proper corporate action on
the part of the Company (no action by the stockholders of the
Company being required by law, by the Certificate of
Incorporation or By-laws of the Company or otherwise), executed
and delivered by the Company and the Agreements and the Notes
constitute the legal, valid and binding obligations, contracts
and agreements of the Company enforceable in accordance with
their respective terms.
B-3
11. No Defaults. No Default or Event of Default has occurred and is
continuing. The Company is not in default in the payment of principal or
interest on any Debt for borrowed money and is not in default under any
instrument or instruments or agreements under and subject to which any Debt
for borrowed money has been issued and no event has occurred and is
continuing under the provisions of any such instrument or agreement which
with the lapse of time or the giving of notice, or both, would constitute
an event of default thereunder.
12. Governmental Consent. No approval, consent or withholding of
objection on the part of any regulatory body, state, Federal or local, is
necessary in connection with the execution and delivery by the Company of
the Agreements or the issuance, sale or delivery of the Notes or compliance
by the Company with any of the provisions of the Agreements or the Notes.
13. Taxes. All tax returns required to be filed by the Company or
any Subsidiary in any jurisdiction have, in fact, been filed, and all
taxes, assessments, fees and other governmental charges upon the Company or
any Subsidiary or upon any of their respective properties, income or
franchises, which are shown to be due and payable in such returns have been
paid. For all taxable years ending on or before December 31, 1988, the
Federal income tax liability of the Company and its Subsidiaries has been
satisfied and either the period of limitations on assessment of additional
Federal income tax has expired or the Company and its Subsidiaries have
entered into an agreement with the Internal Revenue Service closing
conclusively the total tax liability for the taxable year. The Company
does not know of any proposed additional tax assessment against it for
which adequate provision has not been made on its accounts, and no material
controversy in respect of additional Federal or state income taxes due
since said date is pending or to the knowledge of the Company threatened.
The provisions for taxes on the books of the Company and each Subsidiary
are adequate for all open years, and for its current fiscal period.
14. Use of Proceeds. The net proceeds from the sale of the Notes
will be used to retire outstanding Debt of the Company and for other
corporate purposes. Assuming that none of the Purchasers is a "Creditor"
as that term is defined in Regulation T referred to below, none of the
transactions contemplated in the Agreements (including, without limitation
thereof, the use of proceeds from the issuance of the Notes) will violate
or result in a violation of Section 7 of the Securities Exchange Act of
1934, as amended, or any regulation issued pursuant thereto, including,
without limitation, Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company nor
any Subsidiary owns or intends to carry or purchase any "margin stock"
within the meaning of said Regulation G. None of the proceeds from the
sale of the Notes will be used to purchase, or refinance any borrowing the
proceeds of which were used to purchase, any "security" within the meaning
of the Securities Exchange Act of 1934, as amended.
B-4
15. Private Offering. Neither the Company, directly or indirectly,
nor any agent on its behalf has offered or will offer the Notes or any
similar Security or has solicited or will solicit an offer to acquire the
Notes or any similar Security from or has otherwise approached or
negotiated or will approach or negotiate in respect of the Notes or any
similar Security with any Person other than the Purchasers and not more
than 40 other institutional investors, each of whom was offered a portion
of the Notes at private sale for investment. Neither the Company, directly
or indirectly, nor any agent on its behalf has offered or will offer the
Notes or any similar Security or has solicited or will solicit an offer to
acquire the Notes or any similar Security from any Person so as to bring
the issuance and sale of the Notes within the provisions of Section 5 of
the Securities Act of 1933, as amended.
16. ERISA. Based on the representations of the Purchasers in Section
3.2 of the Agreements, the consummation of the transactions provided for in
the Agreements and compliance by the Company with the provisions thereof
and the Notes issued thereunder will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended. Each Plan complies in all material respects with all
applicable statutes and governmental rules and regulations, and no
Reportable Event has occurred and is continuing with respect to any Plan.
The aggregate existing and reasonably likely liability of the Company and
its Subsidiaries resulting from any or all of the following events does not
exceed $500,000: (a) the Company's or any ERISA Affiliate's withdrawal, or
institution of steps to withdraw, from one or more Multiemployer Plans; and
(b) the institution by the Company or any Subsidiary of steps to terminate
any Plan or Plans. No condition exists or event or transaction has
occurred in connection with any Plan which could result in the incurrence
by the Company or any ERISA Affiliate of any material liability, fine or
penalty. No Plan maintained by the Company or any ERISA Affiliate, nor any
trust created thereunder, has incurred any "accumulated funding deficiency"
as defined in Section 302 of ERISA nor does the Unfunded Pension Liability
under all Plans exceed, as of December 31, 1993 $50,000 in the aggregate.
Neither the Company nor any ERISA Affiliate has any contingent liability
with respect to any post-retirement "welfare benefit plan" (as such term is
defined in ERISA) except as has been disclosed to the Purchasers or as may
be required by ERISA Sections 601-608.
17. Compliance with Law. Neither the Company nor any Subsidiary
(a) is in violation of any law, ordinance, franchise, governmental rule or
regulation to which it is subject; or (b) has failed to obtain any license,
permit, franchise or other governmental authorization necessary to the
ownership of its property or to the conduct of its business, which
violation or failure to obtain would materially affect adversely the
business, prospects, profits, properties or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole, or impair
the ability of the Company to perform its obligations contained in the
Agreements or the Notes. Neither the Company nor any Subsidiary is in
default with respect to any order of any court or governmental authority or
arbitration board or tribunal, except for defaults which in the aggregate
B-5
do not materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
18. Compliance with Environmental Laws. Neither the Company nor any
Subsidiary is in violation of any applicable Environmental Law which
violation could reasonably be expected to have a material adverse effect on
the business, prospects, profits, properties or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole. The
Company does not know of any liability or class of liability of the Company
or any Subsidiary, or any situation, event, condition or any potential
violation of an Environmental Law which could reasonably be expected to
give rise to any liability, under any Environmental Law which liability
(whether existing or potential) could reasonably be expected to materially
and adversely affect the properties, business, prospects, profits or
condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole.
19. Investment Company Act. The Company is not, and is not directly
or indirectly controlled by or acting on behalf of any Person which is,
required to register as an "investment company" under the Investment
Company Act of 1940, as amended.
20. Foreign Assets Control Regulations, etc. Neither the Company nor
any Affiliate of the Company is, by reason of being a "national" of
"designated foreign country" or a "specially designated national" within
the meaning of the Regulations of the Office of Foreign Assets Control,
United States Treasury Department (31 C.F.R., Subtitle B, Chapter V), or
for any other reason, subject to any restriction or prohibition under, or
is in violation of, any Federal Statute or Presidential Executive Order, or
any rules or regulations of any department, agency or administrative body
promulgated under any such statute or order, concerning trade or other
relations with any foreign country or any citizen or national thereof or
the ownership or operation of any property except to the extent such
restrictions, prohibitions and violations, taken in the aggregate, do not
materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Company and its
Subsidiaries, taken as a whole.
B-6
Description of Special Counsel's Closing Opinion
The closing opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the
Purchasers, called for by Section 4.1 of the Note Agreements, shall be
dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in form and substance to the Purchasers and shall be to the
effect that:
1. The Company is a corporation, validly existing and in good
standing under the laws of the State of State of Delaware and has the
corporate power and the corporate authority to execute and deliver the Note
Agreements and to issue the Notes.
2. The Note Agreements have been duly authorized by all necessary
corporate action on the part of the Company, have been duly executed and
delivered by the Company and constitute the legal, valid and binding
contracts of the Company enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent conveyance or similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in
a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Agreements does not, under existing
law, require the registration of the Notes under the Securities Act of
1933, as amended, or the qualification of an indenture under the Trust
Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall also state that the opinion of
Warner, Norcross & ▇▇▇▇ is satisfactory in scope and form to ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ and that, in their opinion, the Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇ shall rely solely upon an examination of the Certificate of
Incorporation certified by, and a certificate of good standing of the
Company from, the Secretary of State of the State of State of Delaware, the
By-laws of the Company and the general business corporation law of the
State of State of Delaware. The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is limited
EXHIBIT C
(to Note Agreement)
to the laws of the State of New York, the general business corporation law
of the State of Delaware and the Federal laws of the United States.
With respect to matters of fact upon which such opinion is based,
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ may rely on appropriate certificates of public officials
and officers of the Company.
C-2
Description of Closing Opinion of Counsel to the Company
The closing opinion of Warner, Norcross & ▇▇▇▇, counsel for the
Company, which is called for by Section 4.1 of the Note Agreements, shall
be dated the Closing Date and addressed to the Purchasers, shall be
satisfactory in scope and form to the Purchasers and shall be to the effect
that:
1. The Company is a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of State of Delaware, has
the corporate power and the corporate authority to execute and perform the
Note Agreements and to issue the Notes and has the full corporate power and
the corporate authority to conduct the activities in which it is now
engaged and is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction in which (i) the character of the
properties owned or leased by it or the nature of the business transacted
by it makes such licensing or qualification necessary and (ii) the failure
to be so licensed or qualified would have a material adverse effect upon
the business of the Company and its Subsidiaries taken as a whole.
2. Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and is duly licensed or qualified and is in good standing in each
jurisdiction in the United States and Canada in which (i) the character of
the properties owned or leased by it or the nature of the business
transacted by it makes such licensing or qualification necessary and
(ii) the failure to be so licensed or qualified would have a material
adverse effect upon the business of the Company and its Subsidiaries taken
as a whole, except that WWW Europe, Ltd., which is in the process of being
dissolved and liquidated, is not in good standing in the United Kingdom,
which is the jurisdiction in which it was organized.
3. Each Note Agreement has been duly authorized by all necessary
corporate action on the part of the Company, has been duly executed and
delivered by the Company and constitutes the legal, valid and binding
contract of the Company enforceable in accordance with its terms, subject
to bankruptcy, insolvency, fraudulent conveyance or similar laws affecting
creditors' rights generally, and general principles of equity (regardless
of whether the application of such principles is considered in a proceeding
in equity or at law).
4. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
EXHIBIT D
(to Note Agreement)
5. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any governmental body,
Federal, state or local, is necessary in connection with the execution and
delivery of the Note Agreements or the Notes.
6. The issuance and sale of the Notes and the execution, delivery and
performance by the Company of the Note Agreements do not conflict with or
result in any breach of any of the provisions of or constitute a default
under or result in the creation or imposition of any Lien upon any of the
property of the Company pursuant to (i) the provisions of the Certificate
of Incorporation or By-laws of the Company, (ii) any statute, law, rule or
regulation, (iii) any judgment, decree, writ, injunction, order or award of
any arbitrator, court or governmental authority, of which we have knowledge
after due inquiry, which is applicable to the Company or by which the
Company may be bound, or (iv) any agreement or other instrument, of which
we have knowledge after due inquiry, to which the Company is a party or by
which the Company may be bound.
7. Based upon the representations and warranties of the Purchasers
contained in Section 3.2 of the Note Agreements and assuming that each
Purchaser is an Institutional Holder, the issuance, sale and delivery of
the Notes under the circumstances contemplated by the Note Agreements does
not, under existing law, require the registration of the Notes under the
Securities Act of 1933, as amended, or the qualification of an indenture
under the Trust Indenture Act of 1939, as amended.
8. In reliance upon the Company's representation set forth in
paragraph 14 of Exhibit B to the Note Agreements and assuming that no
Purchaser is a "Creditor", as defined in Regulation T of the Federal
Reserve System, the issuance of the Notes and the use of the proceeds of
the sale of the Notes in accordance with the provisions of and contemplated
by the Note Agreements do not violate or conflict with Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System.
9. We do not know of any pending or threatened litigation against the
Company or any Subsidiary that in our opinion could reasonably be expected
to have a materially adverse effect on the business or assets of the
Company and its Subsidiaries, taken as a whole, or that would impair the
ability of the Company to issue and deliver the Notes or to comply with the
provisions of the Note Agreements or that would challenge the validity of
the transactions contemplated by the Note Agreements.
The opinion of Warner, Norcross & ▇▇▇▇ shall cover such other matters
relating to the sale of the Notes as the Purchasers may reasonably request.
With respect to matters of fact on which such opinion is based, such
counsel shall be entitled to rely on appropriate certificates of public
officials and officers of the Company.
D-2